1st slide:

Mutual funds:

Mutual funds are investment companies that pool money from investors at large and offer to sell
and buy back its shares on a continuous basis and use the capital thus raised` to invest in securities
of different companies.

Mutual funds are one of the most highly growing products in financial services market. Mutual funds
are suitable for all types of investors from risk adverse to risk bearer. Mutual funds have many
options of return, risk free return,constant return, market associated returned. Mutual funds are
suitable to all age of investors, businessmen, salary person, etc.

Background of the study:

Mutual Fund is a topic which is of enormous interest not only to researchers all over the world, but
also to investors. Mutual funds as a medium-to-long term investment option are preferred as a
suitable investment option by investors. However, with several market entrants the question is the
choice of mutual fund. The study focuses on this problem of mutual fund selection by investors.
Though the investment objectives define investor’s preference among fund types (balanced, growth,
dividend etc.) the choice of fund based on a sponsor’s reputation remains to be probed. We focus on
analyzing the performance of mutual funds by using three models i.e. Sharpe, Treyner and Jensen.

Slide 2:

• To study the Mutual Fund Industry in India

• To compare the performance of various 5 star rated equity diversified mutual fund schemes
over a period of four years.

• To compare the schemes with the returns of benchmark for the past four years.

• To identify the level of risk involved in investing in various equity diversified mutual fund
schemes

slide 4:

types of mutual funds:

1. on the basis of maturity period (open ended and close ended);

Open-end fund is a collective investment scheme which can issue and redeem shares at any time.
2. on basis of investment behaviour (equity, income, balanced, money market, index,etc)

Features:

• Professional Management. , • Diversification.,• Convenient Administration.,Costs

Effectiveness, • Liquidity., • Transparency.,•Tax benefits., • Affordability

selection:

1. Performance Ranking ,2. Ratio Analysis ,3. Total Expense Ratio ,4. Fund
Manager Tenure and Experience,5. Scheme asset size

Risk:

Like most investments, mutual funds have risk — you could lose money on your investment. The
value of most mutual funds will change as the value of their investments goes up and down.

The level of risk in a mutual fund depends on what it invests in. Usually, the higher the potential
returns, the higher the risk will be. For example, stocks are generally riskier than bonds, so an equity
fund tends to be riskier than a fixed income fund.

Some specialty mutual funds focus on certain kinds of investments, such as emerging markets, to try
to earn a higher return. These kinds of funds also tend to have a greater risk of a larger drop in value

Slide 5:

Scope of the study:

A big boom has been witnessed in mutual fund industry in recent times. A large Number of new
players have entered the market & trying to gain market share in this rapidly improving market. The
study will help to know the preferences of the customers, which company portfolio, mode of
investment, option for getting return & so on they prefer

This paper also provides future of mutual funds industry information as well as awareness level
mutual funds. Also this project report of the mutual funds gives an outlook to management as to
how mutual funds are performing in the market situation as a result what may be the future of this
industry.

Methodology:

 Preparation of the research Design:

A research design is the arrangement of conditions for collection and analysis of data. Actually, it is
the blueprint of research project.

The research design used for this project is Exploratory Research and Analytical Research.

 Sources of Data:

Sound marketing research depends upon the existence of facts or directly related to problem
studied. To fulfill a foresaid objective of study, the information was gathered from secondary
sources.

 Research Technique:

. METHOD Here in this research project we have used data which were published on the websites of
Bombay stock exchange, Money control, value research online, National stock exchange and mutual
fund India.

Slide 6:

Sharpe ratio:treynor ratio:

m squared:

Modigliani and Modigliani recognized that average investors did not find the Sharpe ratio intuitive
and addressed this shortcoming by multiplying the Sharpe ratio by the standard deviation of the
excess returns on a broad market index, such as the S&P 500 or the Wilshire 5000, for the same time
period. This yields the risk-adjusted excess return. This, too, is a significant and useful statistic, as it
measures the return in excess of the risk-free rate, which is the basis from which all risky
investments should be measured.

M–Squared=[(Ri–Rf)/Sd.Inv]*Sd.Mkt+Rf

OR

M–Squared= Sharpe Ratio* Sd. Mkt + Rf

Ri=Return from the investment Rf = Risk free return

Jenson:

Leverage factor:
It reports the comparison of the total risk in the fund with the total risk in the market portfolio and
can be used in making investment decisions. It is calculated by dividing market standard deviation by
the fund standard deviation.

Li = Standard deviation of the market Standard deviation of the fund

Slide:6

Slide 7:

Average return:

1st 3 years, icici has highest in 3rd year, then uti and sundaram

Std deviation:

In the year 2017-18 Sundaram BNP Paribas SMILE REG-G showed the maximum volatility by having
standard deviation of 13%. UTI Opportunities Fund had the minimum standard deviation of 18%

For the year 2018-19 Reliance RSF Fund was the most volatile fund with standard deviation of 12%.
IDFC Premier Equity Plan A had the least value of 7%.

For the latest period i.e. 2019-20, there are 3 funds which have the highest volatility with standard
deviation 24%. The least fund with least standard deviation is ICICI prudential discovery fund.

Beta:

Beta measures the non- diversifiable risk of a portfolio normally, the value of beta lies somewhere
between 0.4 and 1.9. In this case, the sample involves only equity diversified schemes. Therefore,
the beta lies at a range from 0.71 to 1.18.

The high risky fund for the financial year 2018-19 was Sundaram BNP Paribas SMILE REG-G Fund
with the Beta value of 1.1 next was Reliance RSF Fund with beta of 1.02.Low risk fund for this year
was IDFC Equity Plan A with beta value of 0.71. While in 2019-20, HDFC equity fund has the highest
BETA value at 1.14.
sharpe ratio:

The performance of all selected mutual fund schemes was really low during the financial year 2017-
18. Funds were even having negative Sharpe ratio. The lowest risk adjusted performance was shown
by Reliance RSF Fund and the value was -3.64. UTI Opportunities Fund which showed the risk
adjusted performance with a Sharpe ratio of -3.23 which was best among all.

Treynor's ratio:

Treynor’s ratio measures the fund’s performance in relation to the market’s performance. The table
shows the Treynor’s ratio of selected mutual fund schemes for the four financial years.

Msquared:

In 2017-18 all the funds showed negative performance as the markets were down too. Among all UTI
Opportunities Fund showed best performance with value of -0.3225 and IDFC Equity Plan gave the
minimum value of -0.4399.

For the year 2018-19 IFDC Premier Equity Plan Fund showed highest values of 1.5624 among all the
funds. And UTI Opportunities Fund had the minimum values of 0.98.

For the year 2019-20, the UTI opportunities fund had the maximum value at 0.065.

Leverage factor:

For year 2016-17, Reliance RSF Fund has the lowest Leverage factor and also less than one means
fund standard deviation is more than market standard deviation and hence investor should consider
not levering this fund by selling of part of holding in the fund. Similarly for Sundaram BNP Paribas
SMILE REG- G fund in 2016-17 and ICICI Prudential Discovery Fund in 2017-18 investor should take
similar steps as the leverage factor is less than one. For year 2019-20, the IDFC premier equity plan
top the leverage factor table.

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slide 17:
slide 18:

The study done on the performance evaluation of Indian mutual funds was fruitful as all the
objectives of the study were successfully achieved. The following are the findings from this study.

slide 19:

Mutual Fund is subject to market risk, analyzing particular fund before investing.

For high return invest in diversified funds, for tax saving invest in ELSS (Equity Linked Savings
Schemes)) equity funds, for moderate risk and return invest in balance funds, for assure return
invest in debt and liquid funds.