Chapter 03

REVIEW OF LITERATURE
I have reviewed similar research undertaken by various other researchers in
India which focused growth of Mutual Funds in India, Mutual funds in
comparison with other investment avenues challenges faced by the Mutual
Fund industry and Indian national income. The view of various researchers
and their work focusing on my area of research has been useful for my
research hence I have stated a few of them below
Adhav Sunil M. & Chauhan Pratap M. (Feb 2015), the author has discussed
phenomenal growth that India’s mutual fund market has witnessed over the
last one decade. The major factor that has attracted many investors has been
the consistency in the performance of mutual funds. The present research
attempted to study comparative performance of mutual funds of selected
Indian companies. The study main focus was on mutual fund schemes of
selected Indian companies comprising Equity schemes, Debt schemes and
Hybrid Schemes. The total of 390 schemes comprising of 178 equity mutual
funds, 138 debt schemes and 74 hybrid schemes were selected for the study.
The performance of selected Indian companies’ mutual fund was analyzed
with the help of Return, risk (standard Deviation), and Sharpe ratio. Also the
selected mutual funds are compared with their respective benchmark. It was
found out that the sector fund performance was better than any other type of
equity funds. Whereas the worst performance was given by infrastructure fund
followed by large cap equity funds. Also Ultra short term debt fund performed
better than the other types of debt funds. The worst performance was given
by long term GILT fund followed by short term GILT funds. The equity
oriented hybrid fund performed better than the other type of hybrid funds. The
worst performance is given by arbitrage fund and conservative debt hybrid
funds. Thus the researchers concluded that Equity, Debt and Hybrid Mutual
Funds have performed better than their benchmark and generated better
returns for the investors of equity mutual funds during 2009-10 to 2013-14.
The researcher discussed that Mutual Fund is a vital link between the retail
and small investors and the capital market. The researcher has done relevant
literature review. The core objective of the fund is to assess the performance
of Mutual Fund schemes of selected Indian companies in terms of risk return
relationship and to compare the performance of Mutual Funds of selected
Indian companies on the basis of benchmark Index. Total of 15 Mutual fund
companies were selected for the study. Simple statistical techniques like
average, standard deviation and Sharpe ratio were used. The researcher
concluded that during the year 2009 and 2014 the performance of Mutual
funds of selected Indian companies is superior.
Agarwal Tanu (Jul 2013), The author discussed that FIIs are termed as hot
money which increases the inflow within the country and contributed towards
the Volatility of BSE Sensex. Inflow of the foreign capital brings foreign
currency ($) into the country which contributes towards the development of
the economy but large portion of capital in stock market comes through
domestic route, in which MF plays significant role. The objective of this paper
is to find out the Correlation between FIIs Net Investment and Sensex and
FIIs Net Investment and MFs Net Investment. This is in consideration to find
out whether FIIs are more correlated with Sensex or MFs. The researcher
used Karl Pearson’s Coefficient of Correlation to analyze the data. The results
of the test were in favour of the objectives of the researcher. The analysis is
done for the data from year 2000 – 2001 to 2012 – 2013. The researcher has
reviewed various research papers during the process of writing this paper.
This research studies the increase in FII investment in the mutual find sector
which will also affect the national income of the country; hence this research
paper is helpful in our topic of research.
Agarwal Gaurav & Jain Mini (Oct-Dec, 2013), In today’s competitive
environment, different kinds of investment avenues are available to the
investors. All investment modes have advantages & disadvantages. An
investor tries to balance these benefits and shortcomings of different
investment modes before investing in them. Among various investment
modes, mutual fund is the most suitable investment mode for the common
man, as it offers an opportunity to invest in a diversified and professionally
managed portfolio at a relatively low cost. This paper attempted to study
mainly the investment avenue preferred by the investors of Mathura, and we
have tried to analyze the investor’s preference towards investment in mutual
funds when other investment avenues are also available in the market. The
researcher has compared mutual funds as an investment avenue with other
avenues like banks, LIC, PPF, Bonds, Real Estate, Commodity market, Gold,
Equity Shares, F & O, NSC, KVP, MIS, and others. The researcher has
collected data from 300 investors including both small and big investors.
Snowball sampling technique was adopted by the researcher and data was
collected through structured questionnaires. All the investment avenues were
evaluated on the basis of Safety, Returns, Liquidity, Convenience and Tax
planning. The results of the study show that more investors were aware about
investment avenues in Bank and LIC as compared to Mutual funds, Real
estate and NSC.
Amarjeet (Mar 2014), The author made proper assessment of various fund
performance and their comparison with other funds helps retail investors for
making investment decisions. The main aim of this paper is to evaluate the
performance of mutual fund and compare these returns with domestic term
deposit rates. The researcher has compared Bank Deposits and Debt funds
on various parameters like returns, administrative expenses, risk, investment
options, liquidity and quality of assets. The research is based on secondary
sources like books, journals magazines and websites. Simple statistical
techniques like averages and rate of returns were used for analysis. The
returns of mutual fund schemes during the period 2008 to 2013 were
considered. The paper has these two limitations that is statistical technique
used and the period of returns of mutual fund.
Amarnath B, Reddy S. Raghunatha & Krishna. K Thulasi (Mar 2014),
According to the author financial inclusion or inclusive financing means the
delivery of financial services at affordable costs to sections of disadvantaged
and low income segments of society. The importance of an inclusive financial
system has been widely recognized in policy circles and has become a policy
priority in many countries. Several countries across the globe look at financial
inclusion as the means to more comprehensive growth, wherein each citizen
of the country is able to use earnings as a financial resource that can be put
to work to improve future financial status and adding to the nation’s progress.
This article throws light on this financial inclusion concept and how far this
concept matches with Mutual Funds and helps to grow. As Mutual Funds pool
the savings of retail investors, the financial inclusion concept may be adopted
experimentally. However, there are plenty of challenges ahead for the fund
houses to approve this concept. The article concludes that however, if there is
broad agreement that appropriately regulated Mutual Fund activity can play a
large part in financial development in all its dimensions. The researcher has
used secondary data. The paper throws light on financial inclusion which
includes access of various financial services and products like micro credit
during emergency, pension for old age and investment schemes, financial
advice, access to financial markets, medical insurance, financial services at
low cost, remittance and payment services, facilities like cheque book,
overdraft, commercial loans, electronic fund transfer, access to debit and
credit cards, savings facility etc.
Bahl Sarita & Rani Meenakshi (Jul 2012), The author investigates the
performance of 29 open-ended growth-oriented equity schemes for the period
of six years ends 2011 of transition economy. The author had used monthly
NAV of different schemes have been used to calculate the returns from the
fund schemes. The study revealed that 48.28 percent sample mutual fund
schemes had outperformed the benchmark return. The results also showed
that some of the schemes had underperformed due to diversification problem.
Results of Jensen measure revealed that 65.52 percent schemes showed
positive alpha which indicated superior performance of the schemes. The
researcher has used Sharpe, Treynor and Jensen models for evaluation of
portfolio performance. The performance of the selected schemes was
compared with BSE Sensex. it would have been better if it was compared with
NSE Nifty. Only open ended schemes were selected for the study. The
schemes selected were based on various themes which might have affected
the results of the research.
Bansal Sandeep, Garg Deepak and Saini Sanjeev K (2012), The author
had examined the performance of selected mutual fund schemes that the risk
profile of the aggregate mutual fund universe can be accurately compared by
a simple market index that offers comparative monthly liquidity returns
systematic & unsystematic risk and complete fund analysis. The fluctuating
characteristics of the mutual fund schemes in the benchmark portfolio showed
to evaluate appropriate required rates of return and switch it as of market
returns. This analysis produces a number of unique predictions about the cost
of capital of different mutual fund schemes with the help of different models
and its impact on alternative investment analysis for the investors in the most
volatile capital market scenario. The researcher has used Sharpe model and
Treynor’s model to evaluate the performance of mutual fund schemes. The
schemes are compared with benchmark index and results are classified in two
categories that is outperformers and under performers. The researcher has
selected only 6 schemes for his research work which makes the sample size
too small. It might have affected the results of the research.
Bansal Sandeep, Kumar Sanjeev, Gupta Surender Kumar, & Singla
Sachin (Jun 2012), Mutual funds offered a number of dividend mutual fund
schemes. In this present paper author had applied a risk-adjusted measure
known as Jensen's Alpha Model on ten randomly selected dividend mutual
fund schemes that estimates how much a manager's forecasting ability
contributes to the fund's returns. On the basis of sample schemes for the
period of 4 years on monthly basis and calculated their NAV. Jensen's Model
measure involves a comparison of the returns that the fund had generated
with the returns expected from the fund with the given level of its systematic
risk (Beta). The difference between two returns is called alpha. The result
showed majority of schemes had performed negatively because negative
Alpha. The researcher has studied the performance of mutual fund schemes
by using Jensen’s Alpha model. This model doesn’t consider entire risk
involved with the fund but only considers systematic risk; it means
unsystematic risk is not considered. The schemes are ranked on the basis of
their risk and return. The researcher has selected only 4 years period and a
sample size of 10 funds. Moreover the data is taken on a monthly basis.
These are the limitations of the study.
Bansal Sandeep & Kumar Sanjeev (Feb 2012), The author made an
attempt to study the performance of selected mutual funds schemes based on
risk-return relationship models, and return on mutual funds compared with
return on equity shares of different sectors of Indian economy. The analysis
has been made on the basis of mean return, intercept beta, Sharpe ratio,
Treynor ratio and Jensen Alpha. The overall analysis found that UTI schemes
were best performers and others had below average performance. The
researcher has compared the returns earned on equity shares by three
different sectors of the economy that is FMCG, Information Technology and
power sector. BSE Sensex used as a benchmark for comparison. The
researcher has briefly explained the various types of Mutual Fund schemes
and reviewed relevant literature for this study. The results of the study support
the problem in hand.
Bansal Sandeep (June 2014), According to the author mutual funds pool the
savings of small investors and make the investment in blue chip companies.
Due to these reasons the study’s main objective was to analyze investor’s
perception regarding the mutual fund industry in India and other investment
tools. Large number of new other investment tools could have led to
competition with the mutual funds for their existence. The study made a
comparative analysis of the mutual fund and other investment tools. The study
aimed to help and understand the investors behavior towards mutual fund and
various other investment plan like PPF, FD life insurance, equity etc. The
study required design a questionnaire and to do a primary survey on investor
perception towards mutual Funds and other investment tools The target
respondents of the primary survey were walk in investors in ICICI bank and
various professional people. The findings of the study reveal that mostly
investors are not aware about all investment tools and mostly see the
transparency in investment tools during invest in particular tools. The
researcher has briefly explained the working and structure of Mutual Funds.
The four phases of development are also explained briefly in this paper. The
concept of close ended schemes is explained in detail. The researcher has
tried to study the risk involved in mutual funds, other investment options and
awareness among investors regarding it. Using personal interview technique
of data collection through questionnaire, response from 30 investors was
taken using convenience sampling technique. The study has certain
limitations like small sample size, application of simple analysis tools and
reluctance of investors to share their investment information.
Bhatt Priyanka, & Vyas Vijay H., In India capital market endows with a
variety of investment alternatives to the investors, to assist them to invest in
different investment tools and to make certain the profitable return. Along with
diverse range financial products, mutual fund ensures the maximum return
and minimum risks to the investors. Development of various mutual fund
schemes in the Indian capital market has proved to be one of the most
catalytic investment avenue in generating significant investment growth. The
Asset management companies are taking vigorous part in financial affluence
and they promote investment practice among the investors. At present there
are 44 Asset Management Companies (AMCs) contain the mutual fund
industry. In this context, close monitoring and performance evaluation of
mutual funds has become more essential. This study is aimed at evaluating
performance of mutual funds and also to inspecting the role of asset
management companies in reference to public and private sector. The main
objective of this study work was to study financial performance of selected
mutual fund schemes through the statistical parameters such as (beta,
standard deviation, coefficient of determination, Sharpe ratio). The findings of
this study would be helpful to investors for their investment decisions in future.
The researcher has studied relevant literature. The study is based on
secondary data. The researcher has selected 6 equity mutual fund schemes
of private sector mutual funds for the study. The selected schemes are
compared with benchmark returns to calculate the performance. During 2010
– 2011 four out of the six schemes performed better then benchmark returns.
During 2011 – 2012 five out of six schemes gave negative returns but it was
less as compared to the negative returns of benchmark. On the basis of
Sharpe ratio and Treynor ratio the returns of all the six schemes are been
ranked.
Bhuvaneswari P, Fernando W R P K, The Indian capital market has
witnessed unprecedented developments and innovations particularly during
the decades of 1980s and 1990s. The present study analyzed the risk and
return of mutual funds performance of top performing funds, the study
concluded that beta values of top six schemes were significantly related to
their market index values. All sample schemes except Reliance Banking
Fund-Growth Plan - Growth Option earned negative returns in the year 2008.
Results of the study indicate that the all sample schemes earned positive
return in the year 2010. The researcher has reviewed relevant literature. In
the researcher opinion selection of an inappropriate scheme will land up the
investor in financial crisis. A proper evaluation of the scheme can safeguard
the investor from financial crisis. The researcher has selected ten growth
option schemes for research purpose. The selected schemes are tested from
various parameters for a period of 3 years. Performance of some of the
schemes is significantly related with market movements where as in some
cases it is not related significantly with market movement.
Brindha G. (Jun 2014), Mutual fund investment has lot of changes in the
recent past, and investors mentality and their expectation are changing in the
present scenario. Investors preference towards returns, risk varies often. The
investor should compare the risks and returns before investing in a particular
fund. For this, they should get advice from experts and consultants and
distributors of mutual fund schemes. The investors can invest in the mutual
fund and can be to get more benefits. Periodically checking up on how the
mutual fund is doing is important, and there are lots of measures that the
investor can use to perform the checking. A funds track record may be the
single most important factor that an investor checks before opting for a mutual
fund product. Hence evaluating funds is important before investing. But it is
becoming increasingly important for investors to take note of other parameters
too, while deciding between mutual funds. Of course, investors need to weigh
the savings on expenses against the performance record before choosing a
fund. Over the past decades mutual funds have grown intensely in popularity
and have experienced a considerable growth rate. The researcher has
explained the concept of mutual funds and its types. The paper also explains
advantages and disadvantages of mutual funds. The researcher has referred
various books. The researcher has also found the reasons for termination of
schemes. The paper is helpful for investors in understanding various
evaluation techniques.
Chaturvedi Shailendra Kumar, Singh Arvind Kumar, Singh Karan Veer
(Nov 2014), The article is all about finding the perception and the awareness
level among the customers in terms of mutual funds. The perception level of
the customers has been found by analyzing the data with the help of SPSS.
The end findings which could be extracted from the analysis were that the
mutual fund is a tax saving investment and to a certain extent a return
oriented investment. The other finding which was found, that the investors
were more prone to public companies rather than the private companies. The
researcher has tried to know why public sector funds are less preferred as
compared to private sector funds. The study is based on data collected from
147 respondents of Lucknow city of Uttar Pradesh. The data is analyzed with
the help of descriptive tools of SPSS software. The study has certain
limitations like reluctance of investors to share personal information, lack of
knowledge etc. the study concludes that majority of the investors prefer
mutual funds for tax saving purpose.
Chaudhury Suman Kalyan & Pattnaik C. S, (Apr 2014) With progressive
liberalization of economic policies, there has been a rapid growth of capital
market, money market and financial services industry including merchant
banking, leasing and venture capital. Consistent with this evolution of the
financial sector, the mutual fund industry has also come to occupy an
important place. The author discussed needs of the population new financial
instruments like mutual funds and institutions like Asset Management
Company (AMCs) are aimed at increasing the range of investment avenues. It
is really challenging for the companies to change the attitude and perception
of people. This research paper attempted to review and assess the
preference of the investors for investment in mutual funds. Further, it intended
to throw light in improving the efficiency of investing surplus money by the
investors towards mutual funds. The researcher has discussed the working
and history of Mutual Funds in this paper. The use of Mutual Funds as an
instrument for financial planning is explained in this paper. The study was
done in Berhampur town of Odisha. The investors of Silk City Securities were
been interviewed through a structures questionnaire. The research is based
on sample size 200 respondents. The researcher has tested seven
hypotheses.
Dash Manoj Kumar (April- June: 2015), According to the researcher mutual
fund has been one of the important instrument in all the capital market in the
world. At present study showed mutual funds play an important role in the
growth of capital market in India. Generally, mutual fund has been a trust that
pools the savings of many investors who share a common financial goal. The
money thus collected would then be invested in capital market instruments
such as shares, debentures, and others securities. The income earned
through these investments and the capital appreciations realized would be
shared by its unit holders in proportion to number of units owned by them.
Thus, a mutual fund is considered the most suitable investment for the
common people as it offers an opportunity to invest in a diversified,
professionally managed basket of securities at a relatively low cost. The
researcher has reviewed relevant literature. The researcher has also
explained the term Mutual Funds, need for evaluation of Mutual Funds, recent
trends in the development of Mutual Funds in India, Mutual Funds schemes,
advantages and disadvantages of Mutual Funds. The main objectives of the
study was to analyze the growth of the Mutual Funds industry in Odisha, to
study the behavior of the risk return and evaluate the performance of selected
Mutual Funds schemes and to identify the factors influencing the investment
decision. Different statistical tools like Standard deviation Sharpe ratio, R
square, Beta Alpha, F test etc.
Dave M. N. & Shukla Hitesh. J. (May 2014), The author elucidated concept
of pooling resources in mutual funds as collective investment instruments
available to the investors to pool their funds into various opportunities
generated by the Asset Management Companies. Basically investment is an
opportunity which investor undertakes and forgoes the current usage to obtain
some amount in future. Mutual Funds are the investment instruments which
are specially devised to attract the novice investors to invest in economy
without having the detailed knowledge about the same. Asset Management
Companies are striving hard to penetrate different market segments by
introducing customized products according to the needs and wants of the
customers. There is a need to understand the perceptions of the investors
towards such products and which are the primary criteria which usually
investor evaluate to do the investments. This study is carried out to
understand the research which has been carried out to analyze the investors’
perception towards Mutual Funds. The researcher has discussed the history
of inception of Mutual Funds all over the world. Relevant literature has been
reviewed. It is observed that investors select Mutual Funds as an investment
option due to various reasons.
Desai Mehul P. & Joshi Mayur K (April 2015), According to the researcher
financial system is divided into four parts a. financial institutions, b. services,
c. market and d. instruments. Financial institutions mobilize resources,
purchase and sell instruments and render various services in accordance with
the practices and procedures of law for his investors. Investing in financial
securities has been complex involving knowledge of various investment tools,
terms, concepts, strategies and process. The success of a financial
investment activity depends on the knowledge and ability of investors to invest
the right amount, in the right type, at the right time. The researcher also said
that the investor has to use his intellect as to where to invest his funds, which
has been an art to be acquired by learning and experience. The basic
requirements for a successful investment are the knowledge of financial
investment principles and the art of investment management. The financial
securities include a. ownership securities (like shares, mutual fund units) and
b. creditor ship securities (like debentures, bonds). Investors can reduce risk
and maximize returns by way of mutual fund investments along with the
expertise of professional fund management offered by different fund
managers. In India, Mutual fund industry is an organized financial system,
accessible to individual investors having varied needs and options. The main
aim of the study was in order to identify important factors which affect the
selection of mutual fund. A careful collection of primary data through
questionnaire was done for same. The researcher has reviewed to relevant
literature. The researcher has explained financial systems. The objectives of
the study were to find out important factors which have an effect on the
selection of Mutual Funds, and to find out the investors’ satisfaction towards
the performance of their Mutual Fund. The study was carried out in Navsari
city, Gujarat. Different statistical tools like SPSS package were used.
According to the researchers majority investors’ invest in Mutual Funds for
wealth creation and Safety.
Faisal. T (Nov 2014), Today, India’s financial system is considered to be
sound and stable as compared to many other Asian countries where the
financial market industry as a significant financial service in financial market
has really been noteworthy. In fact, Mutual funds have emerged as an
important segment of financial market of India, especially as a result of the
initiatives taken by the Govt. of India for resolving problems relating to UTI’s
US-64 and to liberalize tax liabilities on the incomes earned by the mutual
funds. They now play a very significant role in channelizing the saving of
millions of individuals into the investment in equity and debt instruments. This
paper aims at making a critical study of the role performed by mutual funds as
a financial service in Indian financial market. The researcher has explained
economic and financial condition of India in pre and post liberalization period.
The financial system of India is also been discussed in this paper. The future
trends of Mutual Fund were also discussed in this paper.
G. Manju (September 2015), the author said that investment of mutual funds
can be created when investors put their money together. Therefore it’s a pool
of the investor’s funds. Whereas small investors face a lot of problems in the
share market, limited resources, lack of professional advice, lack of
information etc. Mutual funds have come as a much needed help to these
investors. It is a special type of institutional device or an investment vehicle
through which the investors pool their savings to be invested under expert
guidance of a team of experts in wide variety of portfolios of corporate
securities in such a way, to minimize risk, while ensuring safety and steady
return on investment. Mutual funds forms an important part of the capital
market, providing the benefits of a diversified portfolio and expert fund
management to a large number particularly small investors. A mutual fund’s
business is to invest the funds thus collected, according to the wishes of the
investors. In many markets these funds can be articulated as investment
mandates. The present study was to analyze of the investors perception
towards mutual. And also what factors the investors look before investing can
have been observed. Indian Mutual Fund (IMF) industry provides reasonable
options for an ordinary man to invest in the share market. Financial markets
are constantly becoming more efficient by providing more promising solutions
to the investors. The researcher also suggested as of now a big challenge for
the mutual fund industry was to mount on investor awareness and to spread
further. These initiatives would help towards making the Indian mutual fund
industry more vibrant and competitive. Therefore a need has been there to
study investor’s perception regarding the mutual funds. The need of study has
been aroused in order to see the preference, awareness and the investors’
perception regarding the mutual funds in public and private sectors. The study
at first tests whether there is any relation between demographic profile of the
investor and Mutual funds and the factors that influences the selection of
mutual fund schemes. Today in India there have been a lot of mutual fund
schemes available for investment. However investing in mutual fund is a little
difficult process for a layman. They select those mutual funds that heavily
advertise and sell aggressively without paying attention to their performance.
This study aimed at analyzing the performance of mutual funds scheme and
selecting the best one by considering the aspects of risk and return. The study
was done to consider the factors considered by investors and those that
ultimately influence them, the type of mutual funds the investor prefers,
problems in mutual fund investments etc. the sample size of 300 people was
selected for the study. Different statistical techniques like ANOVA, Chi-square
etc were used. From the study the researcher concluded that mutual funds
continue to be a unique financial tool in the country. In any case the poor
performance of many mutual funds schemes may be mostly attributed to the
quality of personnel involved and their matter of fund management.
Gangaiah G, (July 2015). Mutual fund has been the fastest growing product
of the financial services industry. Mutual fund has emerged as a main vehicle
of investment and important source of returns for small investors. The volatility
in the capital market and reduction of interest rates on deposits has been able
to divert a large number of small investors towards mutual fund schemes the
study aimed to evaluate the performance of mutual fund schemes through risk
return analysis. The paper is based on secondary data and for each mutual
fund schemes, the returns have been calculated taking weekly and Net Asset
values since from 2008 to 2013. The slandered conceders interest rates on
bank deposits as risk free asset. The risk return analysis such as Sharpe, and
Trynor measures has been used. The researcher confined its study to growth
and performance of all schemes of SBI Mutual Funds. The objectives of the
study were to evaluate the performance of SBI Mutual Fund schemes. To
evaluate the performance of different of SBI Mutual Fund schemes on the
basis of risk return parameters and to appraise the performance of Mutual
Funds on risk adjusted measures as suggested by Sharpe and Treynor. The
study was done on both primary and secondary data. Different statistical tools
like Standard Deviation, Beta, Sharpe and Treynor ratios etc were used. The
researcher concluded that Mutual funds play a major part in the financial
system of the world economy and also suggested that Mutual funds should
address the problems faced by the investors in serious manners so that the
funds can be channelized in an efficient way.
Geetha N. & M. Ramesh (2011), In this paper the author had studied the
issue of mutual funds in India playing a vital role in mobilizing funds for capital
and financial markets. The role of mutual funds in India was found to be
significant as it generated funds from small investors at large, across the
country. The main objective of the author was to study to elucidate the
perceptions and behaviors of the small investors located in the town of
Chidambaram, Tamil Nadu, South India towards the mutual funds and also
suggest some measures to increase the quantum of investors and
investments as well. The researcher has briefly discussed the history of
Mutual Funds in India and the growth in Assets Under Management. Relevant
literature review has been studied. The study is based on primary data
collected through survey method. The sample size is 187 out of 3863
investors in the area. The data was processed by using SPSS software. The
study concludes that there has been substantial growth in the mutual fund
industry during the post liberalization period.
Goel Deepti & Gupta Richa (May 2014), The landscape of the financial
sector in India is continuously evolving, accredited to regulatory changes
being undertaken, which is leading market participant like the asset
management companies (AMCs) and distributors to restructure their
strategies and adopt business models which will yield sustainable benefits.
Some of the other trends which have emerged strongly over the past year are
heavy outflows triggered by market volatility and partnering of asset
management companies with banks, to increase the strength of distribution
networks. The whole paper is divided into five sections. In the first part, they
have discussed the conceptual framework of mutual fund. In the next section,
they have focused on the growth of mutual fund industry in India. In the third
section, they have analyzed the trends in the mutual fund industry. Then, they
have also discussed the challenges of mutual fund industry. The researchers
have discussed the working, growth, trends and challenges of Mutual Fund
industry. They have also discussed the impact of regulatory framework on the
Mutual Fund companies. The paper also highlights the role of banks and
financial institutions in widening the investor base of Mutual Fund industry.
Govindasamy P. & Viswanathan E. (July 2015), According to the
researcher mutual fund as part of Financial Markets become familiarized
among investors because of their risk sharing nature and also facilitates easy
operations and good return. The researcher coined the word behavioral
finance. Research in behavioral finance is relatively challenging and new.
Within behavioral finance it has been assumed that the attitude structure,
characteristics of market participants and the expectations of the investors
systematically influence the investment decisions as well as market
outcomes. Investors’ attitudes drive from psychological principles of decision
making to explain why people buy or sell stocks. The research we have done
was on the topic “Study on Investors Attitude towards Mutual Fund”. This
study aims at identifying the most and the least influencing factors of the
investors’ attitude. This study is based on descriptive research design. The
data was collected with the help of a questionnaire. The questionnaire
included 25 items that belongs to six categories: - a. Willingness to respond –
Personal Experience, b. Media usage – knowledge gained from outside c.
Investors’ psychology on income d. Other people are considered important –
the direction of funds various sectors e. Emotional factors and habits –
Environmental Circumstances, age etc. f. Culture – Satisfaction level. The
sample size considered for the study was 130 where in all the samples were
the investors of ShareKhan limited, Chennai. The researchers have studied
the psychological perspective of investing in Mutual Funds. The non
probability convenience sampling technique was used. Both primary and
secondary data were collected. Statistical tools like percentage, co relation,
chi-square and average methods were used. With reference to the study the
researchers have put forth some suggestions like the market scenario should
be informed to the customers on regular basis. Hence the researchers
concluded that the mere launching of schemes by institutions alone will not be
sufficient to bring about the necessary performance improvement and to get
the competitive edge.
Goyal Megha & Sharma Anukrati (Aug 2014), In this paper, researchers
discussed about investment behavior adopted by middle class as seeker,
included both groups engaged in either service or business, whose income
exist between Rs.2,00,000 to Rs.5,00,000 per annum. The reason behind
selecting the particular income group is to find that how to manage their
investment with small income after spend their hug expenses. The study has
conducted to answer few important questions about preferences of the
investment instrument as real estate, bullion, precious stones, money market
and capital market etc., investment pattern adopted in a specific manner and
objectives behind opting a particular investment instrument. Investment is one
of the major issues of the class families as their small saving today is to meet
the expenses of tomorrow. So this study also examines the risk bearing
capacity, management between expenses and saving and other factors which
influence their investment decision. The researcher has interviewed 100
respondents in Kota Rajasthan using a structured questionnaire. Non-
probability convenient sampling technique was used for this descriptive
research. The primary data collected was analyzed using simple percentage
analysis tool. The study concludes that investors are keener on low risk, high
liquidity and satisfactory returns providing avenues.
Goyal Shalini & Bansal Dauly (May 2013), The author had discussed the
journey of mutual fund industry in India. Its origin its fall and rise throughout all
these years and tried to predict what the future may hold for the Mutual Fund
Investors in the long run. The author also said that he fund's manager uses
the money collected to purchase securities such as stocks and bonds. The
securities purchased were referred to as the fund's portfolio. Restrictions on
competing products may have acted as a catalyst for the development of
money market and (short-term) bond funds. This study was conducted to
analyze and compare the performance of different types of mutual funds in
India and concluded that equity funds outperformed income funds. This study
further concluded that equity fund managers possess significant market timing
ability and institutional fund managers are able to time their investments but
brokers operated funds do not show market timing ability. Further, it has been
found empirically that fund managers were able to time their investments with
the conditions in the market and possesses significant timing ability. The
researcher has discussed the history of Mutual funds and its types in this
paper. They have referred to various research papers relevant to the topic.
They emphasized on professional management and ranking of Mutual Funds.
The transparency of Mutual Funds is explained through the concept of annual
reports of Mutual Funds.
Gupta Surender Kumar & Bansal Sandeep (Jul 2012), The author had
studied the issue of mutual funds being key contributors to the globalization of
financial markets and one of the main sources of capital flows to emerging
economies. This study provided an overview of the performance of debt
scheme mutual fund of Reliance and Birla Sunlife with the help of Sharpe
Index after calculating Net Asset Values and Standard Deviation. This study
revealed that returns on Debt Schemes were close to Benchmark return
(Crisil Composite Debt Fund Index: 4.34%) and Risk Free Return: 6%
(average adjusted for last five years). The Sharpe’s Index showed that the
return of the selected Debt Fund Schemes was less than even Risk-free-
return rate and the Benchmark Index. Performance of Debt Scheme of
Reliance was better than the performance of Debt Scheme of Birla Sunlife on
the basis of data studied in this report. The researchers have explained the
working of Mutual funds in brief. They have reviewed relevant literature.
Sharpe, Treynor and Jensen models were used for evaluating performance of
the schemes studied.
Hariharasudhan M. & Uppily R. (April 2015), The main objective of the
study was to study whether the Capital protection funds offered by the mutual
fund asset management companies were worth to invest. The researcher has
used the secondary data for this study. The study tried to analyze the
objective of the capital protection funds. Capital protection schemes rolled out
during the period 2006 to 2015 were taken for the study. The returns
generated by schemes were analyzed and the same was compared with other
products like fixed deposit, fixed maturity plans and Monthly income plans.
Looking at the results, it was observed that it was better to approach a
financial planner and invest in a self-constructed portfolio which can generate
better returns when compared to the CPO schemes. The researcher has
explained the term Capital Protection Fund. The research was done on
secondary data collected. A total of 148 funds were analysed out of which 47
had matured whereas 101 were yet to mature. Out of the 47 funds that
matured 28% of schemes delivered less than 7%. Hence the researcher
concluded suggesting that it is always advisable to approach a financial
advisor to work a financial plan for you before investing.
Hasan Jafri Arshad (2013), The present article has discussed the past
performance of the Indian mutual fund industry and the pace of growth it
achieved after being succumbed to regulatory changes by SEBI international.
Factors and non performance that affected the industry and its sentiments. It
analyzed the future implications of the current changes that were being
implemented by the regulator. The returns generated by the equity funds and
the growth of their Assets under Management and future implications of this
relationship would also be analyzed. The researcher has explained the four
phases of growth of mutual funds. The growth in Assets under management
of Mutual Fund Industry during these phases is also explained. The
researcher has also discussed the effect of various government policies on
Mutual Fund Industry. An insight on future expectations from Mutual Fund
Industry is also given in this research paper. The researcher also noticed that
there is a growth in assets under management of schemes which have given
substantial returns in the long term.
HemaDivya K. (Apr 2012), The author had studied that the proper
assessment of fund performance would facilitate the peer comparison among
investment managers and to help average investors successfully identify
skilled managers. According to the author, the growing competition in the
market forces the fund managers to work hard to satisfy investors &
management. Therefore the author emphasized that the performance
evaluation of mutual funds was essential for investors and fund managers
also. This study was confined to evaluate the performance of mutual funds on
the basis of yearly returns compared with BSE Indices. The researcher has
selected five schemes each from four broad categories of Mutual Funds that
is liquid funds, bond funds, balanced funds and Monthly Income Plan (MIP)
funds. The scope of the study is limited as only five schemes from each
category of funds are selected. The study is based on the performance of the
funds during the year 2009 and 2010. Statistical tools like Sharpe Index,
Treynor index, Jensen’s measure and FAMA’s measure are used. Based on
the study, the researcher has given some suggestions to the Mutual Fund
industry.
Iqbal Naila (Jul 2013), The author discussed the term market penetration
indicated how deeply a product or service had become entrenched with a
given consumer market. The degree of penetration was often measured by
the amount of sales that were generated within the market itself. A product
that generates twenty percent of the sales made within a given market would
be said to have a higher rate of market penetration than a similar product that
realized ten percent of the total sales within the same market. Determining
what constitutes the consumer market was the key to the process of properly
calculated market penetration. The researcher has explained market
penetration as one of the four growth strategies of product – market growth
matrix. The researcher has discussed the investment pattern of Mutual Funds
in India. The researcher has tried to analyze the criteria of scheme selection
by small investors. In this paper risk return matrix is also explained. The
researcher has suggested Mutual Fund industry to design products and
strategies for penetration in rural market.
Jacob Tom & Kattookaran Thomas Paul (Jul- Sep 2014), Mutual fund
industry has experienced a drastic growth in the past two decades. Increase
in the number of schemes with increased mobilization of funds in the past few
years shows the importance of Indian mutual funds industry. Proper
assessment of various fund performance and their comparison with other
funds helps retail investors for making investment decisions. Among various
financial products, mutual fund ensures the minimum risks and maximum
returns to the investors, Growth and developments of various mutual funds
products in the Indian capital market have proved as one of the most catalytic
instruments in generating momentous investment growth in the capital
market. In this context, close monitoring and evaluation of mutual funds have
become essential. Therefore, choosing profitable mutual funds for investment
is a very important issue. The main objectives of this research work are to
analysis financial performance of selected mutual fund schemes through the
statistical parameters such as (alpha, beta, standard deviation, rsquared,
Sharpe ratio). The findings of this research study will be helpful to investors
for their future investment decisions. The study is based on15 selected
schemes of Reliance Mutual Fund and Unit Trust of India. The study is based
on secondary data collected from various sources. As the study is based on
selected schemes, the results could not be applicable to the entire sector. The
performance of the schemes was evaluated on the basis of returns and risk
involved in investment. The researcher gave certain conclusions and
suggestions based on the study.
Jani Dhimen J. & Jain Rajeev (Aug 2014), This paper examines the
Investor buying behavior of rural investors for financial assets specifically
focused on mutual fund. As mutual funds are working as one of the key
resource mobiliser in economy it also plays significant role in transmission of
excess money of the investor to the borrower corporate houses. The paper
also concentrates on how demographical factors affects the decision making
process of investors. For the study purpose 100 respondents were surveyed
in Sept./Oct. 2012. It was found that there is significant impact of
demographical factors like Age, Gender, Occupation, Education and income
on the decision making process to buy mutual fund. For better understanding
of the impact of the factors affecting decision making process of investors
ranking of the factors were done. It was found that rural investors used relied
heavily on financial advisor/planner so it is first in the category, after
considering financial planner the investors laid second importance to risk and
return profile of the mutual fund, next was the past performance of the fund
and income planning was forth and finally it was brand the fifth one. The
scope of the study is limited to 100 respondents of Valsad district in Gujarat.
Data has been analyzed by using Chi – square technique. The factors
affecting investment decisions in Mutual Funds are identified as brand, risk
and return profile, role of financial advisors, past performance and tax
consideration. Relevant literature has been studied.
Jani Dhimen & Jain Rajeev (Dec 2013). The author had attempted to
identify, the relationship between AUM mobilized by mutual fund companies
and GDP growth of the India. To find out correlation coefficient Kendall’s tau b
and spearman’s rho correlation ship was applied the data range was selected
from 1998-99 to 2009-10. Kendall’s tau b correlation coefficient was found
+.848 which is significant 1% confidence level. In similar way spearman’s rho
correlation ship coefficient was found +.944 indicates significant relationship
between GDP of the country and AUM mobilized by mutual fund companies.
Both figures suggested that, there was very strong positive relationship
between AUM mobilized by mutual fund and GDP growth of the India. The
researchers have given brief introduction and statistical information regarding
Mutual Funds and national income. The scope of the study is limited as only
one factor is considered for analyzing growth of the economy. The research is
based on secondary data collected from SEBI website. The researcher has
concluded that Mutual Funds would play a key role in the growth and
development of the nation.
Johri D.C, Dr. Saraf Vikas & Malviya Anuj (Jan 2014), This study was an
attempt to understand the performance of the private mutual funds over last
five year. This study also tries to find the correlation between private mutual
funds and mutual fund industry. Top five private mutual funds are taken for
sampling and it is analyzed that the private funds after having enough
potential private funds have seen loss during the year 2011-12,evenwhen
industry have attained growth. The author has studied relevant literature
review. The study is based on performance of 5 private sector funds that is
HDFC, Reliance, Franklin Templeton, ICICI Prudential and Birla Sun-life
Mutual Fund. The assets under management of these funds from financial
year 2007 – 2008 to 2011 – 2012 are analyzed. The performance of these 5
private sector funds is compared with the performance of the Mutual Fund
industry.
Joshi Jay R. (Mar 2013),The author had discussed the factors of investment
decision which concerned individual investor. These factors might affect the
whole investment process. Mutual Funds have become an important portal for
the small size investors. Mutual fund played a vital role in the Indian economy.
The main focus of the study was to know investor’s view about the investment
preference and motivational factors especially for mutual funds. This study is
of descriptive type research. The target population studied the individual
investor in Anand – Vidyanagar area of relatively affluent western state of
Gujarat (India). The survey was based on convenience sampling having 100
investors as sample size. The study tried to identify the consumers’
preference for various mutual funds and the main reasons for investment in
mutual fund schemes. The study also tried to investigate various factors that
investor is thinking before selecting a mutual fund company. Overall the study
had focused on the behavior of individual investors and hence form a part of
behavioral finance area. The scope of the study is limited as majority of the
investors are NRIs, they prefer investing in real estate as compared to Mutual
Funds. The researcher has given certain recommendations like creating
awareness among investors, effective communication, opening customer care
centers etc. the researcher has studied relevant literature review.
Kanta (May 2014), The main focus of this study is, on the factors influencing
the respondents on their choice of Mutual Fund Company. The most
important factors consider before investing in the mutual fund are objective of
the scheme, past performance of a research team, services provided by the
company etc. The best way of surviving and prospering in the competitive
environment is through providing prompt, relevant and efficient information
about Asset under Management, Net Asset Value and information about the
scheme. The researcher has discussed various types of Mutual Funds. The
advantages of Mutual Funds are also been explained by the researcher. The
researcher opined that investors evaluate schemes on the basis of
quantitative aspect that is appreciation in the value of investments, income
ratio and expense ratio and qualitative aspects that is location of collection
centers, timely redemption of units, timely receipt of dividends etc.,
Karrupasamy R. & Vanaja V. (Jul 2013), The author had discussed the
issue of mutual fund, an investment vehicle that pooled together the funds
from investors by issuing units and investing the funds so raised in securities
in accordance with the objectives disclosed in the offer document. Wide
variety of schemes have been launched by mutual fund players which often
confuse the investors, In this complex scenario, this study of performance
evaluation helped the investors to choose the best schemes. The researchers
have done relevant literature review. The study aims at evaluating the
performance of Mutual Funds by comparing their returns with benchmark
returns. Sharpe, Treynor, and Jensen techniques are used to appraise the
fund’s performance. Annualized percentage returns of last 1 year, 2 years, 3
years, and 5 years were been compared.
Karthikeyan R & Preetha R (Mar 2014), Mutual Fund is considered as one of
the investment avenue which is more common now days. A mutual fund is a
trust that pools the savings of a number of investors who share a common
financial goal. The money thus collected is then invested in capital market
instruments such as shares, debentures and other securities. The income
earned through these investments and the capital appreciations realized are
shared by its unit holders in proportion to the number of units owned by them.
Thus a mutual fund is the most suitable investment for the common man as it
offers an opportunity to invest in a diversified, professionally managed basket
of securities at a relatively low cost. The researchers have done relevant
literature review. The aim of the research is to find out the factors responsible
for selecting an investment avenue, to check awareness of Mutual Funds
among investors as an investment option, to study investors perception
regarding Mutual Funds and to analyze the savings behavior of investors.
Primary data was collected from 126 respondents through structured
questionnaire by using non probability sampling technique. Statistical
techniques like correlation, chi- square, percentage analysis etc., were used
for analyzing data.
Kaur Inderjit (Oct. 2013), The study aims at evaluating the performance of
Indian equity mutual funds and further to do attribution analysis of managerial
performance on the parameters of diversification, timing and selectivity for the
period 2008-10. Based on the performance for 2008-10, top ten open ended
growth funds have been selected for the study. The authors have evaluated
the performance of funds using Sharpe index, Treynor index and Jensen
alpha. The Treynor-Mazuy model has been used to test the timing and Fama
measure has been used to test the selectivity skills of mutual fund managers.
The research findings show that on an average mutual funds track their
benchmark and an investor is benefitted by the less risky investment. The
results have implications for investors as mutual funds outperform the market
and attribution analysis showed that ‘managerial acumen’ is present. The
results have been in contradiction with previous research in developed
markets. The researcher has done relevant literature review. The research is
based on 10 open ended equity Mutual Funds and their risk and return
characteristics. The researcher has also analyzed the performance indicators
through statistical techniques like Jensen Alpha, Treynor Ratio and Sharpe
Ratio. Hence the researcher concluded that after the empirical findings related
to performance evaluation, market timings and selectivity skills among the top
10 equity Mutual Funds in India for the period of 2008 to 2010 showed that
there exists significant positive alpha among Indian Mutual Funds.
Kaur Sukhwinder, Batra G. S. & Anjum Bimal (Nov – 2013), Mutual funds
have added new dimensions in fund raising capacity of corporate sectors. It
acts like a mediator between small investors and corporate sector.
Considering these points this paper attempts to know the investors perception
towards selection of mutual funds. Moreover this study is also attempted to
give suggestions to investors for making investment in mutual funds. Both
primary and secondary data has been used in the study. 200 investors have
been taken for survey. A five point Likert scale questionnaire has been
constructed. The analysis of data has been done with factor analysis. The
findings of the study revealed that investor consider mutual funds as flexible
investment option, efficient Asset Management companies and they think
investment in stock market is risky and complex. The study has suggested
that investors should consider long historical data, size and age of the fund,
fund charges and some measure to analysis the funds for investments. The
researchers have done relevant literature review. The researcher has given
some suggestions to investors based on the research. The study showed that
as compared to investing in stock market investors prefer Mutual Funds.
Khurana Ashok & Panjwani Kavita (Nov 2010), The author said that Mutual
fund was a mechanism for pooling the resources by issuing units to the
investors and investing funds in securities in accordance with objectives as
those disclosed in offer document. The author emphasized that the investors
need to know how risky individual assets are and their contribution to the total
risk of the portfolio. The author said that by using certain key statistics before
investing the investors can know which fund gives more return, which fund is
performing well, which fund is more risky etc., an investor can analyze
different mutual funds. Mutual fund returns can be compared using Arithmetic
mean & Compounded Annual Growth Rate. Risk can be analyzed by finding
out Standard Deviation, Beta while performance analysis is based on Risk-
Return adjustment. Funds are compared with a benchmark, industry average
analysis of volatility and return per unit. Based on the quantitative data the
study showed that all the funds except one outperformed the Benchmark in
terms of compounded annualized growth rate. The researchers have done
relevant literature review. The study was based on 15 open ended balanced
funds with growth option. The schemes were selected on the basis of 5 years
returns, corpus size of more than Rs. 250 crores and 5 years compounded
annualized returns.
Kiran Kumar K V & Rakesh H M (Jan 2015), Mutual fund performances
were generally said to be dependent on the performance underlying financial
asset. This study aimed to test if the performances of individual funds can
differ due to their fund characteristics like the size of the fund, age of the fund,
longevity of the fund manager with the fund, investment style adopted,
exposure to large cap stocks, concentration in top 10 stocks, portfolio turnover
ratio, cash holding percentage and expense ratio. Eleven regression models
have been developed to test the overall effect of the above characteristics on
the fund performances and also the effect of individual features. Based on
such study on 75 diversified Indian Equity Mutual Funds, it has been
concluded that, all the fund characteristics have significant combined impact
on the fund performance, as measured by Jensen’s Alpha index. Number of
stocks held and expense ratio of the fund also had significant impact on the
fund performance, when considered singularly. The researchers have done
relevant literature review. The study aimed to test the performances of
individual funds can differ due to their fund characteristics like the size of the
fund, age of the fund, longevity of the fund manager with the fund, investment
style adopted, exposure to large cap stocks, concentration in top 10 stocks,
portfolio turnover ratio, cash holding percentage and expense ratio
Kumar Abhishek (Oct 2012), According to the author the lessons learnt
during recession have indeed put a lot of pressure in making key decisions
among the rational investors. Rational investors need more data and have to
spend more time in making key investment decisions. Mutual funds have
been a favorable investment opportunity and have been trusted as a safe
investment. This paper tried to analyze some of the key issues. The paper
understood the growth and the potential of Mutual Fund industry and analyzed
its success. The author have done exhaustive cross performance study of
Mutual fund industry by analyzing around 1025 mutual fund schemes of India.
The author also analyzed the performance of various mutual fund schemes
and its contributions to assets management during the study period (2002-
2009) and its insight about the performance of the mutual fund under short
term and long term period. Investor’s behavior in allocating their investments
among various assets available in the market compared to Mutual funds in the
changing economic Scenario. The paper was an exhaustive study in the field
of Mutual funds performance and the progress of Mutual funds in India. The
researcher main aim of the study was to understand the growth and potential
of Mutual Funds industry and analyze its success. Cross performance study
of Mutual funds by analyzing around 1025 mutual fund schemes in India.
Investors’ behavior in allocating their investments among the various assets
available in the market compared to Mutual Funds on the changing economic
scenario. The researcher also studied the life cycle of investors on the basis
of financial condition or wealth. The researcher also discussed five stages of
the investors’ financial cycle that is a) Accumulation Stage b) Transition stage
c) Reaping stage d) Intergenerational transfer stage e) Sudden wealth stage
Kumar Manoj (Apr 2013). The author discussed investment as the
employment of funds on assets with the aim of earning income or capital
appreciation. In the past, investment avenues were limited to real estates,
schemes of the post office and banks. A wide variety of investment avenues
are open to the investors to suit their needs and nature. The required level of
return and the risk tolerance level decide the choice of the investor. The
researchers have done relevant literature review. The researcher has given a
brief introduction of various investment schemes other than Mutual funds. The
aim of the researcher was to study investors’ preference towards shares and
Mutual Funds, investors’ preference towards other investment alternatives,
objective of investment and important attribute for investment consideration.
The research is based on primary data collected through structure
questionnaire using simple random sampling technique, from a sample size of
100 respondents. The scope of the study is limited to 100 respondents
located in urban areas of Agra city.
Kumar Vipin & Bansal Preeti (Feb-2014). The author discussed the
advantages of mutual funds include professional management, diversification,
variety, liquidity, affordability, convenience, and ease of recordkeeping—as
well as strict government regulation and full disclosure. Financial markets
have been more extensive with wide-ranging financial products trying
innovations in designing mutual funds portfolio but these changes need
unification in correspondence with investor’s expectations. Thus, it has
become imperative to study mutual funds from a different angle, which is to
focus on investor’s perception and expectations. This research paper focused
attention on number of factors that highlights investors’ perception about
mutual funds. The researchers have done relevant literature review. The
study is based on primary data collected from 125 respondents through
structure questionnaire. The study aims at finding preference of investors
about various investment avenues, finding investors preference over
switching from fund and investment etc., The researcher has used statistical
tools like mean, median, and chi square test for data analysis
Lamba Vibha (Feb 2014). The author discussed issues of investment in
equity and portfolio management service (PMS) comes as an answer. The
business of portfolio management has never been an easy one. Juggling the
limited choices at hand with the twin requirements of adequate safety and
sizeable returns is a task with complexities. Given the unpredictable nature of
the market it requires experience and research to make the right decision. In
the end it boils down to make the right move in the right direction at the right
time. The term portfolio management in common practice refers to selection
of securities and their continuous shifting in a way that the holder gets
maximum returns at minimum possible risk. A portfolio manager by the virtue
of his knowledge background and experience helps his clients to make
investment in profitable avenues. The purpose of present study was to
analyze the scope and importance of portfolio management in India. The
researcher has given a brief introduction about technicality and legality of the
term portfolio management service. The various methods, objectives,
functions, steps, importance, prospects of portfolio management were
discussed by the researcher.
Lilly J. & Anusuya D. (Jun 2014). The present study attempts to evaluate
the performance of mutual funds by taking into consideration the past five
years data (2008-09 to 2012-13) of Asset under management and Total
number of schemes. The study further focuses upon sector-wise, scheme-
wise and category- wise asset under management and number of schemes.
The study also attempts to calculate growth rates to show trends in asset
under management and number of schemes in mutual fund industry. The
researchers have done relevant literature review. The study concluded that
Indian overseas schemes and Gold ETF schemes had grown rapidly during
the research period. The assets under management of Gold ETF grew during
the research period.
Mehta Yogesh Kumar (Feb 2012). The study was based on selected equity
funds of public sector and private sector mutual fund. Corporate and
Institutions who form only 1.16% of the total number of investors accounts in
the MFs industry, contribute a sizeable amount of 56.55% of the total net
assets in the MF industry. It was also found that MFs did not prefer debt
segment. Study found that during 2005-08, from the date of inception.
Franklin India Tax shield-Growth outperformed and recorded highest returns
(26.05%). During the last five years. SBI Magnum Tax Gain Scheme 93-
Growth recorded highest returns (27.36%). HDFC Tax Saver-Growth has
lowest expense ratio of 1.98 and was ranked third with 20.20% returns. As far
as portfolio turnover is concerned SBI Magnum TGS 93-Growth has
performed exceptionally well. The entry load and investment amount are at
minimum and same for all funds. Under the top five schemes in order of
returns SBI Magnum Tax Gain Scheme 93-Growth recorded highest
27.3623% returns. The Sundaram BNP Paribas Tax saver (OEF)-Growth has
performed well in the past three years, posting a maximum return of 6.29%
vis-à-vis an average return of 0.5% for similar category funds which is 12
times the average performance. It also outperformed with the benchmark
index BSE 200 (-2.01%) for three years. The researcher has reviewed
relevant literature. The study is based on secondary data. The researcher has
given a brief introduction of Mutual Fund industry. The researcher attempted
to analyze the fact of total recourses mobilization and the overall performance
of the fund. The period for the study was from the year 2001 to 2008. The
researcher concluded saying an efficient portfolio management with full
information would be helpful for the investor to take wise decision under
complex market situations.
Meenakshi & Yadav S.K.S. (Jan-Jun 2014). The author discussed mutual
fund as an institutional investor played a vital role in causing the stock market
to function on sound and healthy lines. Worldwide, the mutual fund or Unit
Trust as it called in some parts of the world has a long and successful history.
The popularity of mutual fund has increased manifold. In developed financial
markets, like the United States, Mutual Fund has almost over taken bank
deposits and total assets of insurance fund. Public Sector Banks and financial
institutions began to establish mutual funds in 1987. The private sector and
foreign institutions were allowed to set up mutual funds in 1993. Today there
are around 40 mutual funds and over 300 schemes with total assets of
approximately Rs. 97000 crores. The paper presented an analysis of Mutual
Fund Sector in India with the study of three significant companies of India.
The researchers have reviewed relevant literature. The study is based on
primary and secondary data. The researchers have briefly explained the
concept of Mutual Funds. The study focuses on UTI, Bank of India and TATA
Mutual Fund.
Monica M. V, & Manoj P. K. (Jan-Mar, 2014). The article sums up the
commonalities found across Mergers and Acquisitions (M&As) in the Mutual
Fund Industry during the last 25 years of 1987-2012. The Elements of Value
Creation in the M&As of Indian Mutual Funds are arrived at using Case Study
method. Population and sample size equals to 43 being the number of AMC
mergers, AMC takeovers and Scheme takeovers. It is for the first time, such a
comprehensive study is taking place in the Indian Mutual Fund Industry hence
adding to knowledge base. It helps to understand how value creation is
sought after in the marketplace by Mutual Funds. Though the factors identified
are not having equal weightage in valuation, further studies can be taken up
to establish the significance and extend of influence on valuations. For
beginners in Portfolio Management & Mutual Funds, it offers useful guidance
to dirty their hands on designing strategies and practitioners can draw insight
from the differing outcomes of these events. The researchers have explained
the term Merger in Indian Mutual Fund Industry. The researchers have
referred to relevant literature. The objectives of the study were a) to overall
study the growth prospects and challenges of the Indian Mutual fund Industry
b) to identify the determinants of valuation in Mergers and Acquisitions
amongst Mutual Funds.
Naik Rajesh Manikraoji & M R Senapathy (Oct 2013). Mutual fund has
become the most suitable investment for the common man as it offers an
opportunity to invest in a diversified, professionally managed basket of
securities at relatively low cost. It is a tool that allowed small investors to
access well diversified portfolio of equities, bonds and other securities and
each shareholder participates in the gain or loss of fund. Investments in each
security are spread across wide cross section of industries and sectors that
risk is diversified & reduced. Post liberalization many private players started
mutual fund companies some of them being Reliance mutual fund, ICICI
mutual fund, HDFC mutual fund, LIC mutual fund, kotak mutual fund, SBI
Mutual fund etc. The performance of these funds has varied depending on the
investment policies of the AMC and the effectiveness of the fund manager.
Mutual fund companies must try to understand that not only the High net
worth individuals and institutional/non- institutional investors, but also the
investors who are potential ones and are important market segment.
Companies would have to shape products suitable for the investors and
market them effectively by increasing the awareness of investors. The
researchers have reviewed relevant literature. The study aimed at
understanding the growth prospects and challenges of Mutual Fund industry
in India. It also aimed at identifying the determinants of valuation used by
Mutual Funds in mergers and acquisitions. The study was done for the period
1987 to 2012. The researchers have given an overview of the Mutual Fund
industry. Based on the research important suggestions are given by the
researchers.
Nair Ratheesh K (Nov 2014). This paper focused on three aspects: (a)
Mutual fund a tool to stabilize Indian economy. (b) Review of existing literature
with respect of mutual fund performance and (c) Asset management and
channelization of scattered savings in the infrastructural development of India.
The result showed that mutual fund has been a powerful tool and financial
product to mobilize scattered savings among investors and channelize this
fund to infrastructural development and thereby economic development of the
country. The role of Banks and Financial institution that promote mutual fund
business as an ever increasing in the market regulated economy in India. The
researchers have reviewed relevant literature. The study aimed at evaluating
the role of Mutual Funds in mobilizing scattered savings in India. It also
studies the past performance of Mutual Funds on the basis of resource
mobilization. The researcher has listed the various types of funds in India. The
institutional set up of Mutual Funds is explained in this paper. The researcher
concluded that Mutual funds has been a powerful tool to mobilize scattered
savings and emphasized on the role of banks and financial institutions to
promote Mutual Funds.
Narayanasamy R, Rathnamani V. (Apr 2013). The author had studied
investment avenues to the investors in India to help them to invest in various
industries and to ensure the profitable return. Among various financial
products, mutual fund ensures the minimum risks and maximum return to the
investors. Growth and developments of various mutual funds products in the
Indian capital market has proved to be one of the most catalytic instruments in
generating momentous investment growth in the capital market. This study
mainly focused on the performance of selected equity large cap mutual fund
schemes in terms of risk- return relationship. The main objective of this
research work is to analysis financial performance of selected mutual fund
schemes through the statistical parameters such as (alpha, beta, standard
deviation, R-square, Sharpe ratio). The findings of this research study will be
helpful to investors. The researchers have reviewed relevant literature. The
study was based on 5 schemes of Private Sector Mutual Funds. The study
was done during calendar year 2010, 2011 and 2012. The study is based on
Secondary data collected from various sources. The researcher concluded
that performance of selected schemes was affected by Benchmark Index.
Navi B. S, (February 2015) Investors have many investment opportunities
but they should be intelligent enough to select the scheme in which they
would invest. Investing in various types of assets has been an interesting
activity that attracts people from all walks of the life irrespective of their
occupation, economic status, education and family background. Savings form
an important part of the economy of any nation. The study depends majorly
on the primary data and the questionnaire had been served to 90 respondents
to collect information with respect to investment avenues and awareness.
Simple statistical tool like percentage and averages are used to analyze and
interpret the data. The researcher main objective was to study the perception
towards Mutual Fund and Equity and provide feasible solutions on the basis of
the findings of the study. The researchers have reviewed relevant literature.
The study was carried out in the city of Belgaum, Karnataka. Primary and
secondary data was collected by simple random sampling technique. The
researcher found out that Mutual Funds are better option for the investors.
Also a number of broker advisors should be increased in order to create
awareness about their stock broking services and to attract new customers.
Palani S. & Mohamed Chilar P. (Dec 2013). The author emphasized that the
development of capital market in the country is an important prerequisite
which only would enable industrial development., business growth and there
by contributions towards economic development, without any doubt it could be
stated that economic development., measured in the form of growth in GDP or
NNP is one of the objectives of every country in the world. A well integrated
Financial System alone could hasten economic growth, which it does through
channelizing productive resources towards industrial growth and
development. In the present days it could be emphatically stated that finance
is a very important resource for industrial development. Hence mobilization
and utilization of finance take a prime position in the list of priorities for the
agenda of economic growth. The researchers have reviewed relevant
literature. The researcher has used Sharpe Ratio, Treynor’s Measure and
Jensen Measure to calculate portfolio returns. Based on the study researcher
has given suggestions to investors.
Pasalkar Nutan Vijay (2015) Capital formation is one of the major
determinants of a country’s ability to produce goods and services. In capital
formation, one can identify three major sub-processes. They are a. savings, b.
financing and c. investment. Various financial intermediaries have been
involved in the process of conversion of savings into investment. These
include banks, insurance companies, non banking financial companies and
Mutual Funds. Mutual Fund Industry has been growing fast since the
globalization of the economy in 1990 -91. Mutual Funds play an important role
in the process of conversion of savings of individual small savers into
investment. Mutual Funds are a best alternative for those who do not have
much knowledge about how to trade in capital market. Mutual Funds offer a
bundle of benefits to the small investors. Fund managers gather and process
information collect savings, identify suitable opportunities for investment,
make best possible investment strategies and then invest funds in best
opportunities. They continuously monitor the progress of these investments.
Mutual Funds are supposed to become the best investment vehicle for small
investors who once upon a time were interested in direct equity investment.
This paper focuses on the comparison of Mutual Fund investment vs Direct
Equity investment. The researcher has reviewed relevant literature. The main
objectives of the research were a) to compare Mutual Fund Investment with
direct equity investment b) to study the preferences of individual investors
investing in Mutual Funds and C) to study the present practices of Mutual
Fund Investors. The researcher used both primary and secondary data. 100
respondents for Pune City were selected for conducting the study. The
researcher concluded that with the passage of time there has been a
remarkable change in the investment preferences of individual investors.
Investors have stared shifting from traditional low risk investment avenues to
modern high risk investment avenues like equity and Mutual Funds. Also the
researcher suggested that there is a need to familiarize this investment
avenue to the investors as the investors feel that Mutual Fund Industry is
comparatively new than equity market.
Pandey Megha (2013) The author discussed that actively managed funds
always overlapped passively managed funds or Index Funds. This research
dealt with a comparative analysis between performances of both the funds.
Actively managed and passively managed. T test is applied to compare their
means and by this research the derived results shows that actively managed
funds gives more returns. The researchers have reviewed relevant literature.
The researcher has briefly explained the process of development of index
funds in India. The study aimed at comparing the performance of equity
diversified funds and index funds during 2004 to 2009. It also aimed at
analyzing funds performance on the basis of investment style and topmost
securities in the fund portfolio. The study is based on 17 equity index funds
and equity diversified funds each. Returns of the funds during last 1 year, 3
years and 5 years are compared.
Patro Archana & Kanagaraj A. (2012). The author had analyzed the trading
activity of Indian mutual funds and investigated whether Indian mutual fund
managers were engaged in herding behavior. Results were compared with
previous studies in mature as well as developing markets to determine the
level of maturity of the Indian capital market. It was found that managers herd
primarily when they trade in large capitalization stocks or stocks that belong to
the most famous indices. The herding effect seems to affect both purchases
and sales of stocks. Furthermore, the Indian mutual funds tend to herd more
often when purchasing than when selling a stock, and when trading large
stocks. The study contributed to the discussion regarding market efficiency
and traditional asset pricing models validity. Evidence on herding by
institutional investors could explain whether there are different types of
investors having different trading pattern. Investigating herding on Indian
mutual funds would help researchers, investors, traders and regulators. The
researchers have reviewed relevant literature. The research is based on
portfolio holdings of 30 equity Mutual Funds. The schemes were selected on
the basis of certain criteria. Quarterly performance of the funds was to
analyze from June 2009 to June 2011.
Paul Tarak (2014). The growth of mutual fund industry in India has been
impressive in the recent past. Despite of this growth, investments in mutual
fund products in India are low as compared to other global economies.
Several reports have identified that the mutual fund industry has failed to meet
the expectation of the investors particularly in the retail segment. This paper
considers mutual fund retail investors as customer of mutual funds and
attempts to study the gap between the retail investors‟ degree of perceived
experience and their degree of expectation in respect of customer
communication dimension‟ of marketing mix. The study was conducted in the
state of Assam covering three district headquarters- Dibrugarh, Guwahati and
Jorhat. The study revealed that significant gap exists between the degree of
expectation and the degree of perceived experience of the retail investors of
the mutual fund while focusing from the viewpoint of customer communication
dimension of marketing mix. The researchers have reviewed relevant
literature. The study is based on primary data collected through structured
questionnaire. The researcher has explained the term Marketing Mix. The
objective of the study was to find the gap between the degree of expectation
and degree of perceived experience from the customers’ viewpoint and the
dimension of Marketing Mix. The researcher concluded that investors’
awareness and education should be seriously taken care of as apriority issue.
The researcher also mentioned that marketers’ agents and brokers have to
make Mutual Fund investment clearly understandable and hassle free for the
investors.
Prabhu Gauri & Vechalekar N. M. The study revealed that mutual funds
provide a platform for a common investor to participate in the Indian capital
market with professional fund management irrespective of the amount
invested. The Indian mutual fund industry is growing rapidly and this is
reflected in the increase in Assets under management of various fund houses.
Mutual fund investment is less risky than directly investing in stocks and is
therefore a safer option for risk averse investors. Monthly Income Plan funds
offer monthly returns and invest majorly in debt oriented instruments with little
exposure to equity. This paper made an attempt to identify various factors
affecting perception of investors regarding investment in Mutual funds. The
findings would help mutual fund companies to identify the areas required for
improvement in order to create greater awareness among investors regarding
investment in mutual funds. The researchers have reviewed relevant
literature. The study aimed at analyzing investment pattern of investors, level
of awareness among investors regarding Mutual Funds, type of scheme
preferred by investors, factors determining investors’ decision like company
reputation, liquidity, higher returns, etc. and level of awareness among
investors about monthly income plan (MIP) fund. The researcher conducted
the survey in Pune city between the period of June 2013 to September 2013
and collected data from 150 respondents through questionnaire. Data was
collected from only those investors who had knowledge of Mutual Funds and
had invested in Mutual Funds. Based on a study the researcher has given
certain conclusions regarding investors’ perceptions towards MIP funds.
Prathap G. & Rajamohan A. (Dec 2013). The author had studied how mutual
funds have become an important intermediary between households and
financial markets particularly the equity market. By providing liquidity low cost
shares in a diversified portfolio of financial assets selected by professional
money managers. Mutual funds have enabled an increasing number of
households to enter financial markets and the diversified investment structure
of mutual funds and diversified risk contributed tremendously in the growth of
mutual funds. The researchers have referred to relevant literature. The study
aimed at analyzing awareness among investors regarding Mutual Funds and
measuring the level of satisfaction of investors in Mutual Funds. The study is
based on data collected from 500 investors of 5 districts of Tamil Nadu that is
Trichy, Coimbatore, Chennai, Cuddalore and Madurai. Data was collected
through a structure questionnaire between the periods June 2012 to
December 2012. The various statistical tools like Chi square test, Cross
tabulation and simple percentages were used. Based on a study the
researchers have given certain conclusions awareness among Mutual Fund
investors in the state of Tamil Nadu.
Prajapati Kalpesh P & Patel Mahesh K (Jul 2012). The researchers have
attempted to do a comparative study of performance of Mutual Funds in India.
Various statistical tools like Treynor's ratio, Sharp's ratio, Sharp's measure,
Jensen's measure, and Fama's measure were used. The study is based on
data of NAVs on daily closing basis collected from Association of Mutual
Funds in India (AMFI) website. The study is based on NAV data from 1st
January 2007 to 31st December 2011. The researchers have reviewed
relevant literature. The study aimed at evaluating and comparing performance
of selected equity diversified Mutual Funds and to compare its performance
with market performance. The study is based on secondary data. The
researcher has randomly selected 5 equity diversified schemes each from
Birla Sun Life, HDFC, Reliance, ICICI Prudential and UTI Mutual Fund. The
performance of the selected Mutual Fund is compared with BSE Sensex.
Based on the research, it is concluded that positive returns were given by
most of the Mutual funds selected.
Priyadarshini E. & Babu Chandra A. (Apr-Jun 2011). The study attempted
the valuation of mutual funds emerging as India’s investment vehicle of
choice. As there were a variety of investors in all types of fund schemes, the
competition was very intense in the present scenario. ARIMA method is one
of the most sophisticated extrapolation methods for forecasting. In this paper,
some of the mutual funds in India had been modeled using Box-Jenkins
autoregressive integrated moving average (ARIMA) methodology. Validity of
the models was tested using standard statistical techniques and the future
NAV values of the mutual funds have been forecasted. The researcher has
given a brief overview of the Mutual Fund industry and the ARIMA
methodology. Five of the top ten Indian Mutual Funds were analyzed. The five
Mutual Funds analyzed were a) Tata Mutual Fund b) Sahara Mutual Fund c)
Reliance Mutual Fund d) UTI Mutual Fund and e) HDFC Mutual Fund.
Priyadarshini E. (Nov- Dec 2013). In this paper, the Net Asset Values of four
Indian Mutual Funds were predicted using Artificial Neural Network after
eliminating the redundant variables using PCA and the performance was
evaluated using standard statistical measures such as MAPE. RMSE. etc.
The study is based on net asset values of 4 out of the top 10 Mutual Funds
namely ING Mutual Fund – Dividend Yield Growth Option, Reliance Mutual
Fund – Regular Savings, HDFC Mutual Fund – Top 200 and ICICI Mutual
Fund – Prudential Growth Option. The researcher has referred to relevant
literature. Based on the study the researcher has given certain conclusions.
Poornima S. & Sudhamathi R. K. (Oct 2014). The author discussed
phases in mutual fund industry which witnessed tremendous changes. First
phase (1964-87) was solely dominated by UTI. Second phase (1987 -1993)
was marked by the entry of public sector mutual funds. Third Phase (1993 –
2003) witnessed the entry of private sector funds. Fourth phase (since
February 2003) was the period during which UTI was bifurcated into two
separate entities, namely UTI of India, functioning under the purview of mutual
fund regulation and UTI Mutual Fund, registered with SEBI and functions
under the mutual fund regulations. The researchers have analyzed the growth
of Mutual Funds in India between the year 2000 and 2014. The researchers
concluded that tremendous growth has taken place in Mutual Fund industry
since the entry of private sector funds. The major percentage share of Mutual
Funds is constituted by open end Mutual Funds. On the basis of portfolio type,
income portfolio precedes the industry as compared to equity portfolio
schemes. Investors are also attracted towards other types like ETF’s,
Overseas FOF’s (Fund of funds) and Gold ETF’s.
Poojara J. G. & Christian S.R (Apr 2012). According to the author mutual
funds are dynamic Financial Institutions (FIs) which play a crucial role in an
economy by mobilizing savings and investing them in the capital market, thus
establishing a link between saving and the capital market. The research paper
“Mutual Fund is an important intermediary in mobilization of funds in Indian
financial market” reflects the growth of Mutual funds in Pre-Liberalization Era,
Post-Liberalization Era, Net resources mobilization by Mutual Funds during
1970-71 to 1992-93 and Net resource mobilization by different private sector
Mutual Funds. It also sketches bring to a close interpretation and concluded
the innovative financial product like Mutual Fund is an important intermediary
in mobilization of funds in Indian Financial Market. The researchers have
briefly discussed Mutual Fund Industry during pre and post liberalization era.
They have also discussed about the resource mobilization done by private
sector and compared it with resources mobilized by UTI and Public Sector
funds. The researchers have referred to relevant literature.
Raghunandan M V (January 2015), The study was conducted to find out a.
the psychology of the investors towards investment in Mutual fund, b. to know
the preferences of portfolio, c. to find the most preferred channel. A mutual
fund has been a type of professionally managed collective investment vehicle
that pools money from many investors to purchase securities. The main
objective is concerned with getting the opinion of people regarding Mutual
fund and what they feel about availing the services of Financial Advisors. The
researcher has discussed the introduction of Mutual funds, types of Mutual
Funds a) open ended funds b) closed ended funds c) Unit investment trusts
and d) exchange traded funds, advantages and disadvantages of Mutual
Funds. The study found out that most of the respondents invested in Gold or
Mutual Funds than any other sector. Whereas the most vital problem spotted
was ignorance. Hence the researcher concluded that Investors should be
made aware of the benefits, also running a Mutual Fund requires complete
understanding of the peculiarities of Indian Stock market and also the psyche
of small investors. Brand and distribution channels also play an important role
in Mutual Funds.
Rajkumar S. & Venkatramaraju D. (Jan-Mar 2014). The author analyzed the
motive that the investors preferred to have liquid money rather than having
physical money. It is perceived that mutual funds are considered the most
liquid method of holding their funds. There are many research scholars who
have tried to study the performance of mutual funds and also have analyzed
the attitude of investors investing in mutual fund. In this research, the author
has tried to identify whether investors have chosen their funds based on
liquidity rather than having to choose them on the basis of the level of safety
of mutual funds. Even though there have been various researchers who have
attempted about the study of mutual fund performance and individual
investors preference. The researcher has done relevant literature review. The
research is based on primary data collected from 150 respondents as well as
secondary data collected from websites, journals, books and magazines. Data
was processed through SPSS and tools like reliability statistics, co-relation,
ANOVA, Chi -square and factor analysis were used.
Ramanujam V. & Bhuvaneswari A. (Feb 2015), The author discussed
mutual fund as a special type of investment institution that acts as an
investment conduit. It pools the savings, particularly of the relatively small
investors, and invests them in a well diversified portfolio of sound investment.
Mutual fund issues securities to the investors in accordance with the quantum
of money invested by them. The profit or losses are shared by the investors in
proportion to their investments. The investment intermediary offer a variety of
services to the relatively small investors who on their own cannot successfully
construct and manage an investment portfolio mainly due to the small size of
their funds, lack of expertise and experience. This paper attempted to analyse
growth of mutual funds for last twelve year period i.e. March 2000 to March
2011. The researchers have referred to relevant literature. The researchers
have given a brief introduction of working of Mutual Fund industry. The study
is based on secondary data collected from websites, journals, books and
magazines. The study aims at analyzing growth of assets under management,
sector wise sales and redemption on Mutual Funds, scheme wise mobilization
of resources of Mutual Funds, examines the total number of folios and
schemes. The study is done between the periods of March 2004 to March
2014. Based on the study the researchers have given certain conclusions.
Rama Krishna Y & Raju R. (Dec 2014). Small investors look at mutual funds
as safest avenue to enter equity markets. They expect that the fund
management with large Assets Under Management (AUM), professional
managers, low transaction fees, access to information, and ability to forecast
the markets will fetch them more returns than a naïve investment strategy.
These expectations of small investors lead to large volumes of research on
performance of mutual funds. In this study we tried to assess the performance
of mutual fund schemes offered by a public sector undertaking in India. In all,
eight open ended equity schemes were selected for the study. One year Net
Asset Values (NAVs) of these schemes were used to measure the
performance. The researchers found that majority of the schemes have
positive excess returns. The researcher has done relevant literature review.
The study is based on NAVs of 8 open ended equity schemes of LIC Nomura
Mutual Fund during the period 1st October 2013 to 20th Sept 2014. The
monthly average returns of all the schemes were analyzed during the period
under study using Sharpe index, Beta values etc. The researchers concluded
that most of the schemes gave positive returns on the monthly basis. They
also suggested that the fund managers should have diversified their portfolio
by reducing investments in banking stocks.
Rathnamani V. (Jan. - Feb. 2013). The author discussed growing importance
of mutual fund investment in India, when compared with other financial
instruments. Mutual fund are said to be the best channels for mobilizing the
funds of the small investors and contribute significantly to the capital markets.
The study explained briefly about the mutual fund industry and also helped to
understand the role of investment pattern and preferences of investors behind
investing in mutual fund. The researchers have briefly explained the
importance of Mutual Funds, its evaluation and phases in its growth. The
researcher has done relevant literature review. The study aimed at analyzing
the extent to which Mutual Fund is an effective mode of investment for the
investors, studying the growth of Mutual Fund industry, analyzing the
perception and awareness of investors regarding Mutual Funds, finding the
preference to investors regarding various investment avenues and finding the
factors that attract investors towards investing Mutual Funds. The study is
based on primary data collected from 100 respondents through questionnaire
from people of different groups in Trichy city as well as secondary data
collected from websites, journals, books and magazines. Statistical tools like
Cross tabulation, Chi-square test, Pearson Correlation etc were used to
analyze the data. Based on the study the researchers concluded that Mutual
Funds were preferred as an investment avenue due to high returns at low
level of risk, safety and liquidity. The researchers have also recommended
that Mutual Fund companies should conduct awareness programs and
educate the investors regarding the benefits of investing in Mutual Funds,
security and safety provided to investors by Mutual Funds.
Rekha Rathore, Shelly & Jaya (Sep 2014). The main purpose of doing this
research by the author is to know about Attitude of retail investor towards
Mutual Fund in District Yamuna Nagar, Haryana (India). To achieve objectives
the primary data has been collected through structured questionnaire.
Secondary data has been collected from reports, books, journals, magazines,
other published data and related websites. For collecting the primary
information random sampling technique is used. The sample size restricted to
100 respondents of retail investors of Yamuna Nagar District. Chi square
statistical technique is used to draw the result from the collected data. The
researchers have given a brief introduction about Mutual Funds. The
researchers have done relevant literature review. The study is aimed at
analyzing the impact of demographic factors like age, gender, education,
occupation, income and savings on the attitude of retail investors towards
investing in Mutual Funds, and ranking the factors affecting attitude of retail
investors. Based on the study the researchers concluded that investors have
positive attitude towards investing in Mutual Funds as it gives maximum
returns with minimum risk.
Rao K. Mallikarjuna & Ranjeeta Rani H. (Jul 2013). The paper analyzed
various factors such as the Liberalization, Privatization and Globalization
measures undertaken by the Government of India opened the way for the
entry of private sector and foreign players into this industry. Consequently,
this has emerged as a highly competitive financial service industry today. In
this paper, an attempt has been made to study the performance of selected
balanced schemes of mutual funds based on risk-return relationship models
and various measures. Balanced schemes of mutual funds are the ones
which are mostly preferred by Indian investors because of their balanced
portfolio in equity and debt. The analysis has been made on the basis of
mean return, beta risk, total risk, Sharpe ratio. The researchers have briefly
explained the classification of Mutual Funds on the basis of structure,
investment objectives, geographical classification etc. The researchers have
done relevant literature review. The study aimed at comparing performance of
selected open ended schemes with CNX Nifty and evaluating the
performance of selected schemes in terms of their risk and return and
evaluating the fund managers’ stock selection. The study is based on the
performance of 10 balanced Mutual Fund schemes during the period of 2011
to 2013. The study is based on secondary data collected from various
websites. Based on the study and empirical results the researchers concluded
that many out of the selected schemes under performed as compared to the
market returns. Lack of professional management in security analysis,
inadequate diversification, highly conservative approach, poor stock selection
etc, are the reasons for poor performance of the schemes.
Rajasekar D. (Sep 2013). The author in order to understand the level of
investor’s preference, a survey was conducted taking in to consideration
various parameters involved in investors decision making. For the purpose of
evaluation a questionnaire survey method was selected keeping in mind
objectives of the study. The data was collected from primary and secondary
sources. The primary sources were collected from the investors who invested
in various avenues. The secondary sources are from books, journals and
internet. The data was analyzed using the statistical tools like percentage
analysis, chi square, weighted average. The report was concluded with
findings and suggestions and summary. From the findings, it was inferred
overall that the investor are highly concerned about safety and growth and
liquidity of investments. Most of the respondents were highly satisfied with the
benefits and the service rendered by the reliance mutual funds. Based on the
study the researcher has given following suggestions a) Mutual Funds should
diversify their portfolios to reduce the investors risk b) Mutual funds should
offer more choices or varieties of schemes to the investors c) Mutual funds
should focus on tapping the investment potential of retired people d)
Diversified portfolio of Mutual Funds has a potential to reap high returns in
medium and long term.
Ray Sarbapriya (2011). The author analyzed mutual funds being emerged as
an important segment of financial market of India, especially as a result of the
initiatives taken by the Government of India for resolving problems relating to
UTI’s US-64. This paper tried to analyze the crisis faced by Unit Trust of India,
specially its largest savings mobilization scheme- US64 and evaluate overall
performance of UTI in terms of savings mobilization ,profitability, dividend
distribution, income and expenditure pattern, investible funds, redemption and
net inflow of funds. At last, the paper recommends some measures in
overcoming the challenges faced by UTI. The researcher has given a brief
introduction of Mutual Funds and especially Unit Trust of India (UTI). The
phases in evolution of Mutual funds and the structure of UTI are also
discussed. The researcher has also analyzed the performance of UTI and
analyzed the challenges faced by it during and before the crisis. The
recommendations of Deepak Parekh committee for bail out of UTI are also
discussed in this paper. Based on the study the researcher has given certain
conclusions.
Ritu (September 2014). Mutual fund sectors have been one of the fastest
growing sectors in Indian economy that have potential for sustained future
growth. Mutual funds make saving and investing simple and affordable.
Anybody with an investible surplus of as little as a few hundred rupees can
invest in mutual funds. The innovative marketing strategies of mutual fund
companies in India are influencing the retail investors to invest their surplus
funds in different types of securities. The advantages of mutual funds include
professional management, diversification, variety, liquidity, convenience as
well as strict government regulations and full disclosure. For investors who
risk adverse it is better to invest in mutual funds and for those who are risk
taker it is better to invest in stock market. SEBI is the regulatory body to
control and regulate the securities market and mutual funds industry in India.
The researcher has brief explained the working of Mutual Funds. The study
aimed at introducing the concept of Mutual Funds and its various schemes,
analyzing the growth of Mutual Funds, studying the opportunities and
challenges for investors and giving suggestions for future growth. Based on
the study the researcher has given following suggestions a) increasing the
distribution network b) exploring alternatives for distribution of Mutual Funds
c) upgrading distribution network d) technological up gradation e) increasing
awareness among investors f) providing better services etc.
Sarish (2012), In this paper the author had undertaken a study on mutual
funds. The mutual fund sectors are one of the fastest growing sectors in
Indian Economy and have awesome potential for sustained future growth.
Mutual funds make saving and investing simple, accessible, and affordable.
The advantages of mutual funds include professional management,
diversification, variety, liquidity, affordability, convenience, and ease of
recordkeeping—as well as strict government regulation and full disclosure.
Booming stock markets & innovative marketing strategies of mutual fund
companies in India are influencing the retail investors to invest their surplus
funds with different schemes of mutual fund companies with or without
complete understanding of Mutual Funds (MF). This paper focuses on the
analysis of the mutual funds, its benefits, and drawbacks. Keeping in mind the
rise and fall in the money market it is better to invest in mutual funds for those
investors who are risk adverse and for those who are risk taker it is better for
them to invest in share market. This paper aims at exploring the potential of
mutual funds in India with all problems complexities and variables and
suggesting the means and ways of meeting the challenges for developing the
mutual funds in tandem with its potential of economic growth. The researcher
has explained the term Mutual Funds, Cash instruments, Derivative
instruments, various schemes of Mutual Funds, government securities,
industrial securities, debentures, preference shares, equity shares, call money
market, commercial paper (CP) and certificate of deposits (CD). The
researcher concluded that most of the funds are organized in the form of
trusts and overseen by trustees or the board of directors.
Saritha B. (Feb 2012). Mutual Funds are dynamic Financial Institutions (FI)
which play a crucial role in an economy by mobilizing savings and investing
them in the capital market, thus establishing a link between savings and the
capital market. Therefore the activities of mutual funds have both short-and
long term impact on the savings & capital markets and the national economy.
The study aimed at evaluating the performance of selected equity funds on
the basis of profitability and advising the investors on equity funds having
good performance track record. The study has following limitations a) its only
for the period of 5 years b) it is based on 80 equity fund schemes of private
sector c) other equity funds which were newly introduced or were giving less
returns were ignored. The study is based on 25 equity fund schemes out of
220 equity fund schemes of private sector. The data is analyzed using
FAMA’s components of investment performance measure.
Sasikala V & Lakshmi A. (Jan 2014). The paper was undertaken to know
the after meltdown period risks and returns of 2008 top hundred mutual funds
and compare with 2010 top hundred mutual funds published in Business
today. The analysis of alpha, beta, standard deviation, Sharpe ratio and R-
squared were declared high, low, average, above average and below average
of risks and return of funds. The researchers have done relevant literature
review. The researchers have given an introduction to Mutual Funds. The
researcher wanted to study the difficulty of risk and variance of return of top
performed Mutual Funds before and after the meltdown period of the year
2008. Around a 100 Mutual Funds schemes were analyzed. Finally the
researchers concluded that selection of Mutual Fund scheme is not an easy
task if a investors wants to get fruitful returns, .and in order to be a successful
investor in Mutual Fund have to make right decisions
Sathya Pal, Sharma N. K. & Ravikumar. R `(Aug 2013). In this paper an
attempt has been made to analyze the performance of equity based mutual
funds. A total of 15 schemes offered by 2 private sector companies and 2
public sector companies have been studied over the period April 1999 to April
2013 (15 years). The analysis has been made using the risk-return
relationship and Capital Asset Pricing model (CAPM). The overall analysis
finds that Reliance and UTI have been the best performers. Kotak a average
performer and SBI the worst performer, which gave below-expected returns
on the risk-return relationship. The researchers have done relevant literature
review. The objective of the study was to bring out a comparison between the
performances of equity based Mutual Funds of public and private sectors in
India. The collective data of over 15 years has been considered. The period of
the study was from year 1999 to 2013. The results clearly showed that the
private sector Mutual Funds companies outperformed than the public sector
companies.
Sehdev Razia & Ranjan Pranav (2014). The study deals with preference and
perception of investors towards mutual fund. Its main objective was to study
the factors responsible for the preference for mutual funds as an investment
option. The study also examined the investment objectives undertaken by
investors while investing in Financial Instruments and finds out the highly
used/ preferred source of information for various investments options to invest
in their most preferred Financial Instrument. It was found that “Benefits &
Transparency” is the major factor that is responsible for the investor’s
preference for mutual funds. It is also observed from the study that most of
the investors were moderate risk taker and are interested in Balanced Fund,
through which they can earn higher returns at low risk. People in India still
think with the perspective of savings rather than taking risk and investing in
high ended equity markets. Even investors who invest in mutual funds are
unclear about how they function and how to manage them. So, proper
information must be provided to the investors in order to increase the loyalty
among the investors towards Mutual Funds. The researchers have done
relevant literature review. The study is based on primary data collected from
160 respondents from Delhi in the age group of 20 to 45 years, investing in
various financial instruments and secondary data collected from journals
magazines, periodicals, government reports etc.
Shah Heer Manish (2015) According to the author, in India capital market
provide various investment avenues to the investors, to help them to invest in
various industries and to ensure the profitable return. Mutual fund ensures the
minimum risks and maximum return to the investors among various financial
products. Growth and developments of various mutual funds products in the
Indian capital market has proved to be one of the most catalytic instruments in
generating momentous investment growth in the capital market. Considering
this, close monitoring and evaluation of mutual funds has become essential.
Therefore, selecting profitable mutual funds for investment is a very important
issue. This study, basically, deals with the equity mutual funds that are offered
for investment by the various fund houses in India, This study mainly focused
on the performance of selected equity large and mid cap mutual fund
schemes in terms of risk - return relationship. The main objectives of this
research work are to analysis financial performance of selected mutual fund
schemes through the statistical parameters such as (alpha, beta, standard
deviation, Sharpe ratio). The researcher explained that Mutual fund is a
financial intermediary that pools the savings of investors for collective
investment in a diversified portfolio of securities. The researcher’s objective
was to examine the funds sensitivity to the market fluctuation in terms of
Standard deviation and Sharpe and to access the performance of mutual
funds with regard to the model suggested by Beta and Alpha. The study
examined 10 open ended schemes being launched by various Mutual Fund
companies. Hence the researcher concluded that by analyzing Standard
deviation, Sharpe Beta and Alpha certain funds were the best while certain
the worst. Each measurement has its own interpretation by which an investor
can judge in which fund to invest.
Shah Mamta (Dec 2012). Development of an economy necessarily depends
upon its financial system and the rate of new capital formation which can be
achieved by mobilizing savings and adopting an investment pattern, be its
self-financing (i.e. direct or indirect) where financial intermediaries like banks,
insurance and other financial companies come in the picture and mediate
between savers and borrowers of funds. In the same way there were different
types of investors and each category of investors differed in its objectives and
hence it is imperative for investment managers to choose an appropriate
investment policy for the group with further managing the investment is a
dynamic and an ongoing process. The researcher aimed to study the
marketing practices of Mutual Funds, marketing mix, investors’ perception
regarding compliance of marketing practices as per SEBI rules and giving
recommendations for making marketing practices more effective. The
researcher has done relevant literature review. Based on the study the
researcher has given conclusions.
Sharma Rashmi & Pandya N. K. (2013). In this paper, structure of mutual
fund comparison between investments in mutual fund and other investment
options and calculation of NAV have been considered. In this paper the
impacts of various demographic factors on investors’ attitude towards mutual
fund have been studied. For measuring various phenomena and analyzing the
collected data effectively and efficiently and for drawing sound conclusions pie
charts has been used. The researchers have briefly explained the concept,
working and structure of Mutual Funds. They have also discussed briefly the
concept of NAV and its calculations. The study is based on primary data
collected from 100 investors in Udaipur region through questionnaire. The
researchers have done relevant literature review. The researchers concluded
that the investors are not yet inclined towards Mutual Funds due to lack of
awareness and prefer bank fixed deposits as an investment option. The
researchers recommended that Mutual Fund companies should create
awareness about Mutual Funds and its investment portfolio.
Sharma Rajiv G. (Aug 2013). Indian Mutual Fund (MF) industry provides
reasonable options for an ordinary man to invest in the share market. The
plethora of schemes provides variety of options to suit the individual
objectives whatever their age, financial position, risk tolerance and return
expectations. Investment in mutual funds is effected by the perception of the
investors. Financial markets have constantly been becoming more efficient by
providing more promising solutions to the investors. Being a part of financial
markets although mutual funds industry have been responding very fast by
understanding the dynamics of investor’s perception towards rewards, still
they continuously follow this race in their endeavor to differentiate their
products responding to sudden changes in the economy. Therefore a need is
there to study investor’s perception regarding the mutual funds. The study at
first tests whether there was any relation between demographic profile of the
investor and selection of mutual fund alternative from among public sector
and private sector. The factors under consideration were to compare between
perceptions of public and private sector mutual fund investors are Liquidity,
Security, Flexibility, Management fee, Service Quality, Transparency, Returns
and Tax benefits. The researcher has explained the term Mutual Funds. The
study was done to test the choice of private and public sector funds by the
investors and to find out the factors affecting investors’ perception in the
choice of Mutual Funds of private and public sector funds by the investors.
The researcher concluded that the investors are usually confused while
investing their funds as there are vast number of opportunities including the
stock market, provident fund, real estate and Mutual funds. But Mutual fund is
far more considered the safer mode of investment, and has been giving good
returns as compared to other investments.
Sharma Deepika, Loothra Poonam, & Sharma Ashish (May 2011). The
present investigation is aimed to examine the performance of safest
investment instrument in the security market in the eyes of investors i.e.
Mutual funds by specially focusing on equity-diversified schemes. Eight
mutual fund schemes have been selected for this purpose. The examination is
achieved by assessing various financial tests like Sharpe Ratio, Standard
Deviation, Alpha, Beta and Coefficient of Determination (R2). Furthermore, in-
depth analysis also has been done by considering return over the period of
last five years on various basis, expenses ratio, corpus-size etc. the data has
been taken from various websites of mutual fund schemes and from
www.amfiindia.com. Calculated results are in the favor of Reliance Regular
Savings Equity in terms of returns over the last five years and Birla Sun Life
Dividend Yield Plus in terms of maximum returns by taking minimum risks.
The study will be helpful for the researchers and financial analysts to analyze
various securities or funds while selecting the best investment alternative out
of the galaxy of investment alternatives. Based on the study the researchers
have given the following suggestions to investors for earning good returns
from Mutual Funds a) assessing risk profile b) select less volatile fund which
has given good returns in the past c) diversify portfolio into 3 to 5 funds d)
compare funds return with industry average and benchmark indices while
selecting the fund e) regular review of Mutual Fund Portfolio and investing
with a long term perspective f) ensure liquidity g) professional and efficient
fund management.
Sharma Nishi (2012), Mutual fund as an investment option would surely tap
the savings of common man. But in practice it failed to become a primary
choice for investment to Indian investor. During almost six decades (1965-
2011) the value of assets under management of mutual fund industry
experienced great swings. As against the developed countries where almost
every second investor is a mutual unit holder the product could not get much
popularity in India. In this reference, the present paper attempts to investigate
the reasons responsible for lesser recognition of mutual fund as a prime
investment option. It examined the investor’s perception with reference to
distinct features provided by mutual fund companies to attract them for
investing in specific funds/schemes. The study used principal component
analysis as a tool for factor reduction. The paper explored three factors
named as fund/scheme related attributes, monetary benefits and sponsor’s
related attributes (having respectively six. four and four variables) which may
be offered to investors for securing their patronage. The results were
expected to provide fruitful insight to mutual fund companies for tailoring their
offers suitable to cater the needs and expectations of Indian investors. The
researcher has done relevant literature review. The scope of the study is
limited to the data collected from 250 respondents. Statistical tools like
correlation, standard deviation and mean are used for analysis. In addition
Cronbach Alpha test, Kaiser-Meyer-Olkin measure of sampling adequacy,
Bartlett’s test of sphericity etc are also used for analysis.
Sharma Rajwanti (Sep 2013). A Mutual Fund is a trust that pools the savings
of a number of investors who share a common financial goal. Anybody with an
investible surplus of as little as a few hundred rupees can invest in Mutual
Funds. These investors buy units of a particular Mutual Fund scheme that has
a defined investment objective and strategy. The money thus collected is then
invested by the fund manager in different types of securities. These could
range from shares to debentures to money market instruments, depending
upon the scheme‘s stated objectives. The income earned through these
investments and the capital appreciation realized by the scheme is shared by
its unit in proportion to the number of units owned by them. Thus a Mutual
Fund is the most suitable investment for the common man as it offers an
opportunity to invest in a diversified, professionally managed basket of
securities at a relatively low-cost. The research aims at studying the meaning,
organization, working and growth of Mutual Funds, depicting the present and
future potential of Mutual Funds and finding out factors that affect the
selection of Mutual Funds. The researcher has referred to relevant literature.
Sharma Shalini, Gaur Arti & Arora Nancy (Jun 2014). A mutual fund is just
the connecting bridge or a financial intermediary that allows a group of
investors to pool their money together with a predetermined investment
objective. The mutual fund has a fund manager who is responsible for
investing the gathered money into specific securities (stocks or bonds).
Mutual funds are considered as one of the best available investments as
compared to others. They are very cost efficient and also easy to invest in,
thus by pooling money together in a mutual fund, investors can purchase
stocks or bonds with much lower trading costs than if they tried to do it on
their own. But the biggest advantage to mutual funds is diversification, by
minimizing risk & maximizing returns. This study evaluated the return with risk
associated in the mutual fund and compared the performance of various
mutual fund schemes on the basis of benchmark index so as to bring out
whether the scheme was outperforming or underperforming. The benchmark
was measured by using secondary data. Sharpe's and Treynor’s portfolio
performance measure was used to find the risk premium of portfolio relative to
the total amount of risk in the portfolio. The study brought out that in India
almost every sector is likely to witness a huge growth. The researchers have
briefly discussed the main characteristics of Mutual Funds. The researchers
have done relevant literature review. The study is based on secondary data of
NAVs of 30 randomly selected schemes during the period of January 2000 to
December 2009. The performance of NAV of the selected funds is compared
with BSE Sensex.
Singh Tej & Priyanka (Apr 2014). The author discussed the paper tries to
establish the gap between the public and private sector mutual funds in India
with the help of Gap Index Analysis. The study covers the period from the
year 1998-99 to 2009-10. The study was based on the secondary data which
has been collected from the fact books and published annual reports of both
types of mutual funds for the twelve years. The paper found that the private
sector mutual funds are gaining more in terms of magnitude of mobilization of
funds compared to that of public sector mutual funds. Further, the study also
found that there is a strong evidence of relationship between the pattern of the
gap movement between mobilization of funds and redemption / repurchase of
public and private sector mutual funds. The researchers have done relevant
literature review. The researchers aimed at studying the gap mobilization of
resources in public and private sector Mutual Funds, analyzing the gap in
repurchase by public and private sector mutual funds and comparing the
performance of public and private sector Mutual Funds. The study is
exploratory in nature. It is based on 2 Mutual Funds of Public and private
sector during the period 1998-99 to 2009-10. The study is based on
secondary data collected from various websites, reports, manuals and other
office records. The data is analyzed by using statistical tools like mean,
percentage and correlation coefficient. Based on the study the researchers
have given certain conclusions.
Sundar Vijayalakshmi. (Mar-Apr 2014). Mutual funds in India are becoming
an ideal investment choice compared to safe investments such as Fixed
Deposits and postal which gives comparatively low returns. The growth of the
capital markets in terms of BSE -30 shares Sensex has been still higher, and
the banking sector has been on a roll over the last couple of years, throwing
up huge opportunities for wealth creation on the way. As the Indian economy
does well with over recent times, banks tend to be one of the biggest
beneficiaries. In fact, post the global financial crisis of 2008 and 2009, the
banking index delivered a return of 82% during May 2009 until October 2010,
compared to a return of 40% delivered by the broader market. Investment in
banking sector funds is one of the best avenue which guarantees stable
return with medium risk when compare to other sectors. The researcher has
referred to relevant literature. The researcher has briefly discussed the entry
of public and private sector funds in the Mutual fund industry and discussed
the present status of Mutual Fund industry with reference to growth in assets
under management. The researcher has analyzed the growth of banking
sector in Mutual Fund industry. Based on the research, the researcher has
given certain conclusions like a) Mutual funds have emerged as a strong
financial intermediary b) Mutual Funds have played a significant role in
bringing stability to financial system and efficiently allocating resources c)
Fund managers have to invest the assets under management with a view of
earning reasonable returns but keeping in mind the security of investors fund
d) it was observed by the researchers in their study that banking sector fund
was one of the best avenue which guaranteed stable returns with medium risk
as compared to other sectors.
Sujatha C.K. & Felix Suregka (Aug 2014). Mutual funds are dynamic
institution, which plays a crucial role in an economy by mobilizing savings and
investing them in the capital market, thus establishing a link between savings
and the capital market. This report presents the performance analysis of the
Mutual Funds. It highlights the practical approach in the subject of fund
performance, with special reference to the Equity Fund scheme. This study
compares the mutual funds of Reliance with HDFC and Sundaram Funds in
analyzing smart investment decisions as a gauge of risk-adjusted
performance for the amount of expected volatility and market returns. The
researchers have done relevant literature review. The study is based on
secondary data collected from various books, journals and websites. The data
is analyzed by using various statistical tools like standard deviation,
regression analysis and variance analysis. Based on the study the
researchers suggested that Reliance Capital Assets Management Company
should introduce schemes with low risk and moderate returns in order to
mitigate high risk evolved due to volatility. Further they also suggested that
that Reliance should select safer investments which yield better returns and
design portfolio with moderate risk. The researchers concluded that Mutual
Funds have become an attractive avenue for investors. It is ranked second as
an investment avenue followed by bank investments. Mutual Funds are
considered as an intelligent and diversified investment according to investors.
Suresh R. D. & K. Gurunathan Balanaga (Feb 2015). Investors were
preferred to have liquid money rather than having physical money. It was
perceived that mutual funds are considered the most liquid method of holding
their funds. There have been many research scholars who have tried to study
the performance of mutual funds and also have analyzed the attitude of
investors investing in mutual fund. In this research, author have tried to
identify whether investors have chosen their funds based on liquidity rather
than having chosen them on the basis of the level of safety of mutual funds.
Even though there have been various researchers who have attempted about
the study of mutual fund performance and individual investors preference.
Analytical tools such as ANOVA, chi-square, correlation, percentage analysis
have been used to describe the research. The researchers have done
relevant literature review. The study is based on primary data collected from
150 respondents through questionnaire and secondary data collected from
websites, journals, books and magazines. Based on the study the researchers
concluded that a) both dependent and independent variables taken to analyze
the investors’ preference regarding Mutual Fund investments correlated with
each other b) ANOVA inferred that there is no significant association between
the 2 variables that is income and liquidity in investment
Sindhu. K.P & S. Kumar Rajitha (Sep-Oct 2013) The author discussed a
well-planned investment alone can ensure regular income, capital
appreciation and can meet the financial requirements of the investors. An
investor has to use his discretion in appropriate decision making for the
selection of investment avenues, which is an art acquired by learning and
practical experience. Those investors with lack of knowledge and expertise
about the operation of the financial market may lose their money while
investing in financial securities. So, they need professional advice for the
selection of the right type of investment; otherwise, due to fear of losing their
hard-earned savings, they will never come forward to invest their funds in the
financial market. In today’s highly volatile capital market environment, mutual
funds are looked upon as a transparent and low cost investment avenue. A
At the retail level, investors are unique and are highly heterogeneous, and the
mutual fund schemes' selection will also differ depends on their expectations.
Hence, investors’ expectation is a very important factor in this regard that
needs to be analyzed by all the investment houses. So, the factors that drive
the investment decisions of individual investors to meet their expectations by
investing money in mutual funds need an in depth analysis. One of the most
influencing factors on mutual fund investment decisions is characteristics of
mutual funds itself. Hence the present study makes an attempt to analyze the
influence of characteristics of mutual funds on mutual fund investment
decisions. The researchers have done relevant literature review. The
researchers aimed at studying the influence of characteristics of Mutual Funds
on investment decisions. The study is descriptive and explanatory in nature.
The study is based on primary data collected from 900 individual investors in
Kerala through structured questionnaire and secondary data collected from
websites, journals, books, magazines etc. Based on the study the researchers
concluded that there is a significant influence of characteristics of Mutual
Funds on investment decisions. Further it is also concluded that regular
income and safety from Mutual Funds would lead to increase in Mutual Fund
investments. Asset Management companies of Mutual Funds are suggested
to introduce innovative products which would cater to the needs of individual
investors so that more investors would prefer investing in Mutual Funds.
Singal Rahul, Garg Anuradha, & Singla Sanjay (May 2013). The paper
examines the performance of 25 Growth Mutual Fund Schemes. For this
purpose three techniques were used (I) Beta (II) Sharpe Ratio (III) Treynor
Ratio. Rank is given according to results drawn from this scheme and
comparison is also made between results drawn from different schemes. The
finding showed that Reliance Growth showed highest performance in all
schemes under study. With the comparison of different analysis tools the
highest deviation comes in ICICI Prudential FMCG. This paper helped the
investor to know about the performance of different Mutual Fund Schemes.
This would also be of a great help for investor while taking their investment
decision. The researchers have briefly explained the working and organization
of Mutual Funds. The researchers have done relevant literature review. The
study is based on 25 Mutual Funds, most of which are listed on Stock
Exchanges. The scope of the study is limited for a period of 5 years that is
January 2004 to December 2008. Based on the study the researchers
concluded that a) most of the selected schemes have outperformed the
market returns during the study period b) a moderate correlation existed
between risk and return of the selected schemes c) in most of the selected
schemes Beta is more than 1, it means these schemes are more prone to risk
than the market d) majority of the selected schemes have failed to earn a risk
premium irrespective of their performance measurement model e) on the
basis of risk adjusting return most of the selected schemes have not
performed better than the market but the difference is not found significant.
Singh Ranjit, Singh Anurag, & Singh Ramananda H. (Aug 2011). The
paper studied the factor of increase of their investor base of the mutual fund
companies in the small towns and sub-urban areas. But marketing the mutual
funds in these areas requires the positioning of the products in the minds of
the investors in a different way. The product has to be acceptable to the
investors. It should be affordable to the investors. It should be made available
to them and at the same time the investors should be aware of it. The present
paper dealt with all these issues. It measures the degree of influence on
acceptability, Affordability, availability and awareness among the small town
and sub-urban investors on their investment decisions. The researchers have
referred to relevant literature. The study is empirical in nature and confined to
the suburban areas of Silchar, Assam during the period February 2010 to
April 2010. The study is based on primary data collected through
questionnaire method from 150 respondents using random sampling method
from the Silchar town. Data analysis was done using different statistical
techniques like Cronbach’s Alpha, Friedman test etc. based on the study the
researchers have given certain conclusions a) awareness about Mutual Funds
had highest influence on the decision of the investors regarding investing in
Mutual Funds b) acceptability of Mutual Funds and affordability are second
and third priorities c) there is no significance of accessibility of Mutual Funds
on investors decision regarding investing in Mutual Funds.
Singh Binod Kumar (Mar 2012). In this paper, structure of mutual fund,
operations of mutual fund, comparison between investment in mutual fund
and bank and calculation of NAV etc. have been considered. In this paper, the
impacts of various demographic factors on investors’ attitude towards mutual
fund have been studied. For measuring various phenomena and analyzing the
collected data effectively and efficiently for drawing sound conclusions. Chi-
square test has been used and for analyzing the various factors responsible
for investment in mutual funds, ranking was done on the basis of weighted
scores and scoring was also done on the basis of scale. The researcher has
done relevant literature review. The study is based on primary data collected
from 250 investors in Ranchi region through questionnaire method and
secondary data collected from various sources. Based on the study the
researcher has concluded that a) the respondents were confused about
Mutual Funds and hence were not inclined towards investing in Mutual Funds
b) there is a lack of awareness among investors regarding various functions of
Mutual Funds c) demographic factors like gender, income and level of
education have significantly influenced investors attitude towards Mutual
Funds d) investors were attracted towards return potential, liquidity as well as
flexibility, transparency and affordability of Mutual Funds. In general, in
researcher’s opinion there is a lot of scope for growth of Mutual Funds in India
provided Mutual Funds improve service standards and disclosures.
Srivastava Namita (Mar 2014). An investment has been sacrifice of today’s
consumption to gain profitable returns in the future. Therefore the Investors
have to be very cautious while making investment decision expects higher
return at lower risk. The taxpaying investors prefer to invest their money which
provide them an opportunity to avail some tax exemption apart from other
objectives of investment like better return, safety on their investment, liquidity
etc. These tax saving mutual funds are known as Equity linked saving
schemes (ELSS). These ELSS funds provides tax exemption of the income
invested in them u/s 80(c) of Income Tax Act 1961 other than the attractive
benefits of mutual fund investment higher returns at low risk, safety, minimum
investment , professional management and Transparency etc. This study
attempted to evaluate the performance of ELSS funds and also factors
affecting their performance. The researcher has referred to relevant literature.
The study is based on NAV data of 9 ELSS funds during the period 1993 to
2012 collected from various websites. The researcher has studied the impact
of 5 variables namely risk free rate of return, total risk inherent to individual
funds, Beta of funds, market return and market risk on Mutual Fund returns.
Based on the study the researchers have concluded that a) the selected
ELSS funds generated better returns than any return on risk free securities
but were unable to outperform the benchmark portfolio in terms of average
returns b) through ANOVA test it is proved that there is significant relationship
between fund return, fund risk and market returns c) Explanatory variables
namely risk free rate of return, total risk inherent to individual funds, Beta of
funds, market return and market risk on Mutual Fund returns have their impact
on the fund performance and returns d) ELSS fund performance are affected
by efficient management and diversification of portfolio as well as trends of
the stock market e) the study would be useful to investors and fund managers
in managing their portfolios and outperforming the markets.
Srivastava Sonali & Malhotra Sunita (January 2015).The authors present
study stated about the paradigm shift in risk measuring tools of mutual fund
industry. The main objective of the study was a. to identify appropriate risk
measuring techniques for Mutual Fund Industry, b. to analyze risk return
relationship of selected open ended Mutual fund and c. to analyze investment
opportunities for future and recommend investment strategies. The secondary
data was used to collect NAV value from 2013-2014 of selected debt fund
(SBI gilt fund and ICICI Prudential liquid fund) and equity fund (UTI fund and
Reliance ELSS fund). The statistical tools used to analyze data are standard
deviation, beta, Calmar ratio, Roy’s Safety First Criterion and return. It
appears from the study that equity funds performed better than debt fund.
There is a dependent relationship between risk and return. The researcher
also suggested that the fund manager can adopt Calmar ratio and Safety First
ratio to measure risk because these funds explain the market uptrend which is
more prominent for investment purpose. The result of various risk measuring
tools on selected mutual fund schemes is same as CRISIL mutual fund
ranking. Investors should invest in equity and equity related instruments to
diversify the risk. In further research researcher can use other risk measuring
tools and compare among them that which is appropriate to measure risk. The
present study is done on Equity and Debt fund more funds can also be
included which is the basic limitation of the study. The researchers have done
relevant literature review. The importance of the study was to help to know the
present scenario of Indian Mutual Fund Industry with respect to the risk
measuring techniques. The objective of the study was to identify the
appropriate risk measuring techniques for Mutual Fund Industry, to analyze
the risk return relationship of selected open ended Mutual Fund and to
analyze the investment opportunities for future and recommend investment
strategies. Secondary data was used for the study. NAV of selected Mutual
Fund schemes for the period of year 2013 and 2014 were analyzed. Hence
the researchers concluded that equity funds perform better than debt funds.
They also said that there is a dependent relationship between risk and return
because if the funds have high risk then they generate high return whereas if
the funds have low risk they generate low returns.
Subba Rao P. & Surayya Teki. Mutual fund is an investment company that
pools money from shareholders and invests this money in a variety of
securities, such as bonds, stocks and short term money market instruments
etc. The income earned by these instruments and the capital appreciation
realized by the scheme are shared by its unit holders in proportion to the
number of units owned by them. The aim of this paper is twofold: to present a
review of previous work done and to monitor the continuously changing
behavior of the consumer towards mutual funds at this time. The researchers
have briefly discussed the concept, characteristics, working, phases in
evolution, advantages and disadvantages, types of Mutual Funds. The
researchers have done relevant literature review. The study is based on
primary data collected from 250 respondents including businessman,
serviceman, housewives, students, retired personnel etc, through
questionnaire. Based on the study the researchers concluded that a) among
the respondents, businessman preferred investing in equity shares,
serviceman preferred investing in National Savings Certificate (NSC) where
as professionals and others preferred bank deposits b) almost all the
respondents had more or less experience of investing in Mutual Funds c)
most of the investors preferred private sector Mutual Funds and open ended
Mutual Fund schemes d) among the respondents, businessman and
professionals invested in Mutual Fund with an objective of growth whereas
serviceman and others invested in Mutual Funds with an objective of regular
income e) performance evaluation of the fund is done on the basis of absolute
returns by most of the respondents f) lack of awareness and services are the
two major deficiencies faced by the respondents g) among the respondents
businessmen prefer Kotak Mutual Fund, serviceman and others prefer SBI
Mutual Fund whereas professional showed mixed response towards all the 4
companies h) among the respondents, businessman prefer 5 years or more
period for investing in SIPs whereas others prefer 3 years period for investing
in SIPs.
Sowmiya. G (Jan 2014). Mutual fund is an investment vehicle that pools
together funds from investors to purchase stocks, bonds or other securities.
Each unit in mutual fund is backed by a diversified pool of assets, where the
funds have been invested. The objectives of this research were to know the
basic concepts and terminologies of the mutual funds in public limited
companies and private limited companies, to analyze performance and growth
of selected mutual funds schemes with their NAV and their returns, to identify
the return variance and to provide suggestions based on the analysis. The
researcher has briefly discussed the advantages and disadvantages of Mutual
Funds. The researcher has done relevant literature review. The study is
based on secondary data collected from newspaper (Deccan Chronicle) and
various websites. The researcher has analyzed two Mutual Fund schemes
namely Birla Sun Life Equity Fund (Growth) scheme and Franklin Templeton
India Flexi Fund (Dividend) scheme. The data is analyzed using appropriate
financial and statistical tools like average, covariance, variance, standard
deviation, Beta, Alpha, R-square etc. Based on the study the researcher has
suggested the investors’ to inspect the scheme documents, keep a watch on
NAV regularly and consider market factors like government policies, sales and
trend of that sector while selecting it in the portfolio. The researcher
concluded that during the quarter July to September 2013 the performance of
Birla Sun Life Equity Fund (Growth) scheme was better than Franklin
Templeton India Flexi Fund (Dividend) scheme.
Tandon Shailesh, Nigam Akanssha & Lyall Bobby W (June 2015) The
study was designed to find the alliance between the two factors; a. Mutual
fund and a National Economic Event held on 16th August 2013 when RBI had
announced stringent measures which included curbs on Indian companies
investing abroad and placing fresh curbs on gold imports with the express
objective of reining in a widening current account deficit (CAD) and b. to
stabilize the rupee at reasonable levels by restricting dollar outflows. The
paper explained the concept of Mutual fund and the importance of their
existence according to SEBI. The Research lays platform to further explore if
there would be a significant difference between average performance of
various five star mutual funds NAV before and after the occurrence of the
event or NOT. Using various tools on the secondary data obtained by Mutual
funds fact sheets and Mutual funds magazines which was carried out to help
Investors in taking decision where and what to invest and formulate their
strategies to make the best use of their savings in Mutual funds. The
researchers have explained the term Mutual Funds, the organization and
structure of Mutual Funds etc the researchers have referred to relevant
literature. The researchers’ main aim was the evaluation of growth and
performance of Mutual Funds through evaluating the Net Asset Value. The
study was based on empirical data of the performance of the fund schemes.
The four schemes selected for analysis were a) ICICI Prudential Income
opportunities fund – Direct Plan – Growth b) HDFC Income fund – Growth
option c) DSBPR Government Securities Fund – Regular – Growth d) Baroda
Pioneer Income Fund – Plan A Growth. The researcher has concluded that
the study will help investors take decision from a various number of schemes.
Tankasali Priyanka S. & Kolhar Santosh M. (Apr 2014). The author
discussed the increase in the literacy rate and globalization in India, the
disposable income of an individual has increased, which made a significant
impact on the savings habits of the individual. One of the most preferred
investment avenues for an investor is mutual funds. Mutual fund industry has
seen a lot of changes in past few years with multinational companies coming
into the country, bringing in their professional expertise in managing funds
world-wide. Investors have a wide range of schemes to choose from
depending on their individual profiles. The mutual fund companies have
performed with lower risks and higher profitability within a short span of time
by diversifying the pooled funds. The study aimed at analyzing the trends in
returns of selected Mutual Funds, evaluating the performance of 2 equity
Mutual Fund schemes namely SBI Magnum Blue Chip Fund and UTI Top 100
Fund and analyzing investors’ preference towards these schemes. The
researchers have briefly discussed the evolution of Mutual Funds in India. The
data is analyzed using statistical tools like Sharpe’s Measure, Sortino’s
Measure and standard deviation. Based on the study the researchers
concluded that SBI Magnum Blue Chip Fund performed better than UTI Top
100 Fund by taking higher risk to generate higher return due to effective
management of volatility. Further they also concluded that operating costs of
SBI Magnum Blue Chip Fund were low which led to better returns for
investors.
Tariq Zafar S.M., Chaubey D.S., & Nawab Ali Syed Imran (Feb 2012). After
liberalization and globalization of Indian economy, market witness huge crowd
towards the option of investing in mutual funds but investment in a particular
funds needs a lot of specification like- investor’s objectives, cost. Availability
of funds, risk & return factors etc. and thus invite fundamental study for better
future and growth. This paper aimed to know how the performance of mutual
funds is assessed and ranked after analyzing the NAV and their respective
returns so as to measure investment avenues. For the purpose thirteen most
preferred public and private sector equity diversified growth schemes over a
period of one year viz. 2007-08 have been taken through judgment sampling
and Yield on 10 yr. govt. bond has been taken as the surrogate for the risk
free rate of return viz. 7.56% p.a. First part of paper provides a necessary
insight about the mutual fund. The second part consists of data (collected
from websites & Economic times) and their analysis. The researcher has done
relevant literature review. Based on the study a comprehensive evaluation of
13 equity diversified - growth schemes over a period of 1 year that is 2007-
2008 was done. The objective of the study was to gain practical insight in
application of Sharpe, Treynor, and Jensen ratios, to understand the
interdependence of funds and Index (BSE 200), to evaluate the performance
and rate the funds on the basis of aforesaid ratios. Finally the researchers
concluded that Mutual fund is a unique financial tool due to its advantages like
Professional management, Diversification, Economies of Scale, Liquidity, and
Simplicity with some drawbacks like Costs, Dilution and Taxes.
V. Lathashri, Renuka K. & Lashmi Priya M. The author opined that mutual
fund has been a type of professionally managed collective investment vehicle
that pools money from many investors to purchase securities. A mutual fund
is a professionally managed type of collective investment scheme that pools
money from many investors and invests it in stocks, bonds, short-term money
market instruments and other securities. The income earned through these
investments, and the capital appreciation realized, were shared by its unit
holders in proportion to the number of units owned by them. The researchers
have discussed the Mechanism, Structure, and Functions of Mutual Fund
Industry. The researchers have discussed in detail the structure of Mutual
Fund in India, the role of the Asset Management Company, the sponsor, the
fund sponsor, trustees, investors rights and obligations, portfolio turnover,
types of funds, taxation, advantages of Mutual Funds etc.
Vanaja V. & Karrupasamy R. (2013). The objective of the study was to
evaluate the performance of select Private sector balanced schemes on the
basis of returns and comparison with their bench marks and also to appraise
the performance of different category of funds using risk adjusted measures
as suggested by Sharpe, Treynor and Jensen. Mutual fund is an investment
vehicle that pools together the funds from investors by issuing units and
investing the funds so raised in securities in accordance with the objectives
disclosed in the offer document. Wide varieties of schemes are being
launched by mutual fund players which often confuse the investors. In this
complex scenario, this study of performance evaluation would help the
investors to choose the best schemes available and will also help the AUM’s
in better portfolio construction and can rectify the problems of
underperforming schemes. The aim of the study is to evaluate performance of
selected private sector balanced category Mutual Funds schemes on the
basis of risk – return parameters and also to appraise performance of Mutual
Funds on the risk adjusted measures as suggested Sharpe, Treynor, and
Jensen. The researchers also discussed the function and organization of
Mutual Fund industry. The researcher has done relevant literature review. The
researchers found out that only 2 out of the 5 private sector balanced
category Mutual Funds have earned a return above the average returns
where as 2 firms have made negative returns. It was also found that there is a
positive correlation in case of 12 private sector funds between market returns
and fund returns on the contrary negative relations was found in case of other
13 private sector funds.
Vasantha S., Maheswari Uma, & Subashini K. (Sep 2013). The main
objective of this research paper was to evaluate the performance of selective
open ended equity diversified Mutual fund in the Indian equity market. Mutual
Fund refers to trust which pools the savings of a large number of investors
who share a common financial goal. The money collected from the investors
is invested in the capital market instruments based on the fund’s objective.
The income earned and capital appreciations realized out of these
investments were shared by its unit holders in percentage to the number of
units owned by them. For the purpose of conducting this study HDFC top 200
fund (G), Reliance top 200(G), ICICI Prudential top 200(G), Canara Robeco
equity diversified fund(G), Birla Sun Life frontline equity (G) mutual funds have
been studied over the period of 60 months data i.e. January 2008 to
December 2012.The analysis has been made on the basis of Sharpe ratio.
Treynor ratio and Jenson. The researchers have briefly discussed the need
for investments to park the surplus funds of the individual. The researcher has
done relevant literature review. The researchers compared 5 different open
ended equity diversified funds during the period 60 months that is January
2008 to December 2012. Statistical tools like Co–variance, Beta, Standard
deviation, Correlation and Co-efficient of variation were used. Ranking of
Mutual Funds were done according to Sharpe, Treynor and Jensen measure.
Accordingly the researchers concluded that investors can invest in the Mutual
Fund that matches their investment objective; their risk appetite as well as
analyzing the fund based on various criteria such as risk prevailing in the
market, variations on return, and deviations occurring in the returns.
Veeraiah K. & Kumar Kishore A. (Jan 2014). This study analyzes the
performance of Indian owned mutual funds and compares their performance.
The performance of these funds was analyzed using a five year NAVs and
portfolio allocation. Findings of the study reveals that mutual funds out
perform naïve investment. Mutual funds as a medium-to-long term investment
option are preferred as a suitable investment option by investors. Mutual
Funds are one of the most preferred investment alternatives for small
investors as they offer an opportunity to invest in diversified professionally
managed portfolios at a relatively low cost. Over the past decade, mutual
funds have increasingly become the investor’s vehicle of choice for long-term
investing. In recent times, an important trend in the mutual fund industry is the
aggressive expansion of foreign owned mutual fund companies and the
decline of the companies floated by nationalized banks and smaller private
sector players. The researcher analyzed the performance of Indian owned
Mutual Funds and compared their performance using 5 year NAVs and
portfolio allocation. The researchers have referred to relevant literature. The
main aim of the study was to a) analyze various Mutual Funds and its
performance b) to exhibit wide range of investment options available in Mutual
Funds market by analyzing various schemes with NAVs and portfolio
allocation and c) to help the investors make a right choice of investment, while
considering the inherent risk factors. Data was collected from secondary
sources like Mutual Funds trusts, fund fact sheets and fund offer documents.
The researchers hence concluded transparency in fund management, candid
management-investor relationship and an open door access to Mutual Funds
for all investors would spark the success of Mutual Funds industry in India.
Vijendra C. & Sakriya D. (Jun 2013). Mutual fund products were so designed
to target small investors who were basically intimidated by the mysteries of
stock market but yet to reap huge benefits by investing in the stock market.
The investors of mutual funds are from highly heterogeneous group. So, their
selection of funds also differs. Usually, investors have a tendency to shift their
investment opportunities from investment to another. This tendency
necessitates the Asset Management Companies (AMCs) to have a clear
understanding on the fund/scheme selection or switching behavior of the
investors to design suitable and appropriate products in order to meet the
changing financial needs of the investors. With this back ground, a survey
was conducted among 384 mutual fund investors from the twin cities of
Hyderabad & Secundrabad to study the factors influencing the fund/scheme
selection behavior of these investors. It is hoped that this survey will underpin
the AMCs with regards to planning and implementation of designing,
marketing and selling of innovative products. The study aimed to clearly
understand the nature and role of Mutual Funds in India, to know the
demographics of Mutual Funds investors for sample data, to study the buying
behavior of Mutual Fund investors. The survey was conducted on 384
respondents from the twin cities of Hyderabad and Secunderabad between
the periods of September 2012 to January 2013. The researchers have
referred to relevant literature. The researchers concluded that the survey
findings shall help the AMC’s to develop a strategy, design and marketing of
the product.
Vipinkumar M. (July, 2015), The investment climate in India is getting more
and more attractive year after year. A mutual fund is a portfolio of investment
vehicles such as stocks, bonds, Certificates of deposits, and various other
securities where a professional manager decided what to buy, how much and
when to buy, and sell. The values of fund expressed in terms of its Net Asset
Value (NAV). The researcher has explained the concept of Mutual Funds,
different investment avenues available etc. the main aim of the study was to
identify the best investment scheme in the category of Equity diversified funds
both open and closed ended funds. Secondary data were used to analyze the
5 star and 4 star rated equity diversified schemes. Statistical tools like
Sharpe’s Measure and Treynor Measure were used.
Yadav Srinivas C. & Hemanth N C (Feb 2014). In the study authors had
undertaken is to evaluate performance of selected growth equity funds in
India carried out using portfolio performance evaluation techniques such as
Sharpe and Treynor measure. S&P CNX NIFTY has been taken as the
benchmark. The study conducted with 15 equity growth Schemes (NAV )
were chosen from top 10 AMCs (based on AUM) for the period 1st June 2010
to 31st may 2013 (3 years). The researcher has done relevant literature
review. The researchers attempted to study 15 growth Mutual Fund schemes
across top 10 AMC’s for the period of 1st June 2010 to 31st May 2013. The
data was taken from secondary sources like websites for the period of 2010-
2011, 2011-2012 and 2012-2013. According to the researchers the empirical
data showed that many schemes failed to beat the Benchmark return in the
long run. According to the researcher the limitations of the study were a) only
secondary and quantitative data were considered, primary data that is
investors views and perception on the scheme, fund managers experience etc
were not considered b) past 3 years data is only considered, pat performance
may or may not sustain in future c) it is subject to market risk.