Summer Internship Project

RISK-RETURN ANALYSIS OF MUTUAL FUND SCHEMES

(A Project with VANS SKILLING & ADVISORY)

Submitted in partial fulfilment of the requirements for

Master of Management Studies (MMS)
Academic Year:

Submitted By
Kushal Vijay Gawhane
Roll No. 14
MMS-II, Batch: F-3

Chetana’s R. K. Institute of Management and Research,

Bandra (E), Mumbai 400 051

1
 Declaration

I hereby declare that this report submitted in partial fulfilment of the requirement
of the award for the Master of Management Studies to Chetana’s R.K. Institute
of Management and Research, is my original work and not submitted for award
of any degree or diploma fellowship or for similar titles or prizes.

I further certify that I have no objection and grant the rights to Chetana’s R.K.
Institute of Management and Research to publish any chapter/ project if they
deem fit in Journals/Magazines and newspapers etc. without my permission.

Place : Mumbai

Date : (INPUT THE CORRECT DATE)

Name : Kushal Gawhane

Class : MMS – A (F-3)

Roll No. : 14

2
3
 Certificate

This is to certify that the project submitted in partial fulfilment for the award of
Master of Management Studies of Chetana’s R.K. Institute of Management and
Research is a result of the Bonafede research work carried out by Mr. Kushal
Vijay Gawhane under my supervision and guidance, no part of this report has
been submitted for award of any other degree, diploma, fellowship or other
similar titles or prizes. The work has also not been published in any
Journals/Magazines.

Date:
Place: Mumbai

Director Project Guide: Prof. Suhas Gharat

CRKIMR

4
 ACKNOWLEDGEMENT

The project I had made on “RISK-RETURN ANALYSIS OF MUTUAL

FUND SCHEMES” - A project with VANS Skilling and Advisory.

It was a great chance for learning and professional development. Therefore, I

consider myself as a very lucky individual.
First of all, I express my sage sense of gratitude to our Industry Mentors as well
as Project Guide Mr. Srinivas Chunduru & Mr. Shalaut Jain who gave me
this opportunity to work on this project.
I would also like to thank our Seniors who gave direction in the completion of
this project.

Further, I express my sincere thankfulness to Prof. Suhas Gharat and Prof.

Nalini Krishnan for their kind advice and suggestions and constant help in a lot
of various ways during the project course.
I extend my gratitude to Chetana’s Institute of Management and Research
for giving me this opportunity.

I also acknowledge with a deep sense of reverence, my gratitude towards my

parents and member of my family, who has always supported me morally as
well as economically.

At last but not the least gratitude goes to all of my friends & mentors who
directly or indirectly helped me to complete this project report.

Thanking You,
Kushal Gawhane

5
6
 EXECUTIVE SUMMARY

The growth of mutual funds has been phenomenal. The mobilization of funds
by mutual funds has been on the rise since 1964. When mutual fund market was
thrown open to the private sector in 1993, the corpus of mutual fund in India
has grown tremendously. In few years, Mutual fund has emerged as a tool for
ensuring one’s financial well being. Mutual funds have contributed to the India
growth story as well as helped families contribute into the success of Indian
Industry. People are enjoying the benefits of investing in mutual funds as
information and awareness is rising day by day.

Investments in mutual funds gives exposure to equity and debt markets. These
funds are marked as safe medium or as smart investment vehicles for novice
investors. Every investor requires a healthy return on its investments. But since
the market is very volatile and due to lack of expertise they may fail to do so.
So a study of these mutual funds will help one to equip with benefitial
knowledge about the elements that help trade between risk and return to trade
effectively.

The first two chapter gives insights about the introduction of Risk management,
types of risks involved, History of mutual fund industory, types of mutual
funds, objectives of the study, Research methodology, list of selected Mutual
fund schemes such as blue-chip fund, ELSS, some hybrid and debt funds. One
can have a basic knowledge of mutual funds through the report.

The rest chapters of the project consists of data and its analysis and the
recommended on the basis of the analysis. Fot the collection of data, various
official websites are referred. Statistical tools are used to compute risk and risk
adjusted returns of various selected funds and the data is also comapared with
the respective benchmarked indices. According to the risk appetite of the
people, mutual funds are segregated on the scale of low low to high risk funds
and returns. The data analysed is well organised and presented.

7
 Table of Contents

Chapter No. Particulars Page No.

Chap. 1 Introduction
1.1 Introduction to the Company 7

1.2 Introduction to the Project 9

1.3 Significance of Study 12

1.4 Statement of Problem 13

1.5 Literature Review 14
Chap. 2 Project Details

2.1 Objectives of Project 15

2.2 Methodology 16

2.3 Limitations 17

2.4 List of selected mutual fund schemes 18

2.5 List of indices 22

2.6 Performance measures used in the Project. 23
Chap. 3 Data Findings & Analysis

3.1 Data Findings 26

3.2 Data Analysis 36
Chap. 4 Conclusions & Recommendations
4.1 Conclusions 40
4.2 Recommendations 41

Annexures
Webliography/Bibliography 43

8
 CHAPTER 1 - INTRODUCTION

1.1 Introduction to the Company

VANS –Skilling and Advisors

VANS: Skilling and Advisors founded in the year 2018 is a privately held
organization having its headquarters in Mumbai. It is an organization that
partners with companies along three unique verticals – Skilling Organizations
and its people, Scaling Organizations with an objective of helping them to
reduce time to market and enhancing shareholders value by Investing in
profitable ideas.

It’s one of its kind of Platform that focuses on SME’s, Start-ups and Version
2.0 Companies helping them to scale and transform internal processes with an
objective of driving crucial change and delivering stakeholder value.

VANS is now a 20 people organization that has its presence in Mumbai,

Hyderabad and Bangalore. The value proposition that the organization brings in
for its partner companies is the “non-consultative” approach that leverages the
execution expertise that the team brings in from their collective experience of
more than 100 years.

The unique edge that this organization brings in for its Client is the knowledge
support that is rendered by Research Labs focuses on Matrices, Trends,
Practices and Opportunities available in various sectors and thus serve as back
office advisory for the core team.

The team has so far partnered with Host of Companies in Financial Services;
continuous Process Engineering, Pharmaceuticals, Logistics, New Age E-
commerce and a Unicorn, helping each one of them build processes and create
newer methods of enhancing shareholder value and profits.

9
Srinivas Chunduru Sir is the Chief Mentor at VANS. Also he is a business
leader with over two decades of experience across diverse functions such as
P&L Management, Business Development, Corporate Strategy, M&A, Investor
Relations and Strategic Human Resources.
Lastly it focuses on Skilling and Scaling through innovative products and
gamification. Some of the Signature Scaling methodology includes the
Proprietary “RISK-RETURN ANALYSIS OF MUTUAL FUND
SCHEMES”

10
 1.2 - INTRODUCTION TO THE PROJECT

RISK MANAGEMENT

Riski isi ani unexpectedi eventi andi uncertaintyi whichi investorsi arei willingi
toi takei whilei investingi ini securities. Riski analysisi isi thei processi ofi
assessingi thei likelihoodi ofi ani adversei eventi occurringi withini thei
corporate, government, or environmentali sector. Riski analysisi isi thei studyi
ofi thei underlyingi uncertaintyi ofi a giveni coursei ofi actioni andi refersi toi
thei uncertaintyi ofi forecastedi cashi flowi streams, thei variancei ofi portfolioi
ori stocki returns, thei probabilityi ofi a project'si successi ori failure, andi
possiblei futurei economici states. Riski analystsi ofteni worki ini tandemi withi
forecastingi professionalsi to minimizei futurei negativei unforeseeni effects.
Riski managementi techniquesi helpi toi evaluatei andi estimatei volatilityi
involvedi ini particulari securityi andi thisi volatilityi cani bei managedi
throughi avoidance, diversification, distribution, reductioni etc. therei arei
variousi riski managementi techniquesi whichi helpi investorsi toi diversifyi
theiri riski andi providei reasonablei return. Riski managementi techniquei isi
ani approachi whichi focusesi oni measuringi riski andi volatilityi ofi fundsi
andi helpsi toi identifyi thei portfolioi fori investmenti whichi minimizesi riski
andi maximizesi return. Riski measuringi techniquesi havei beeni developedi
byi Statisticiansi andi Economisti toi constructi portfolioi ofi severali giveni
securitiesi ini thei marketi byi identifyingi loweri riski andi higheri returni fromi
thei currenti market. Variousi riski managementi toolsi arei usedi byi mutuali
fundi managersi toi evaluatei andi identifyi thei fundsi fori investorsi toi
minimizei riski andi maximizei return.
Ai riski analysti startsi byi identifyingi whati couldi goi wrong. Thei negativei
eventsi thati couldi occuri arei theni weighedi againsti ai probabilityi metrici toi
measurei thei likelihoodi ofi thei eventi occurring. Finally, riski analysisi
attemptsi toi estimatei thei extenti ofi thei impacti thati willi bei madei ifi thei
eventi happens.

Quantitativei Riski Analysisi

Riski analysisi cani bei quantitativei ori qualitative. Underi quantitativei riski
analysis, a riski modeli isi builti usingi simulationi ori deterministici statisticsi
toi assigni numericali valuesi toi risk. Inputsi thati arei mostlyi assumptionsi
andi randomi variablesi arei fedi intoi ai riski model.

Fori anyi giveni rangei ofi input, thei modeli generatesi a rangei ofi outputi ori
outcome. Thei modeli isi analysedi usingi graphs, scenarioi analysis,
andi sensitivityi analysisi byi riski managersi toi makei decisionsi toi mitigatei
andi deali withi thei risks.

11
Qualitativei Riski Analysisi
Qualitativei riski analysisi isi ani analyticali methodi thati doesi noti identifyi
andi evaluatei risksi withi numericali andi quantitativei ratings. Qualitativei
analysisi involvesi a writteni definitioni ofi thei uncertainties, an evaluationi ofi
thei extenti of the impacti (if the risk ensues), and countermeasurei plansi in the
casei of a negativei eventi occurring.

MUTUAL FUND INDUSTRY

In economic growth of India financial sector plays an important role. Nowadays

financial market is emerging as a strongest and fastest growing service sector in
India. In financial market Mutual Fund is the strongest financial intermediary
which create a link between various securities market and investors by
mobilizing investors’ money and investing in several mutual
fund schemes by minimizing risk and generating maximum returns from the
market. A mutual fund is a financial product and one of the types of investing
medium that pools money from many investors and invests the money in
securities such as stocks, bonds, and debt. The combined holdings of the
mutuali fund are known as its portfolio.
In India the mutuali fund was first set up by UTI in 1963 and Government of
India in 1987 allowed various Public Sector banks and Life Insurance
Corporation and General Insurance Corporation to enter in the mutuali fund
industry. After UTI, SBI was the first bank who started dealing with mutuali
fund industry in 1987. In 1993 Franklin Templeton was the first private sector
bank who started business in mutuali fund industry. Now every public sector
and private sector banks deals with mutuali play industry. Today there are 44
mutuali fund houses with 10 lakh crore asset under management. From 1996,
SEBI regulated the Mutuali Fund Industry to enhance and protect the interest of
investors. Individual mutuali fund house have Asset Management Company and
it is compulsory for every AMC of mutuali fund to get registered under SEBI.
The main role of AMC is to manage and invest the investors saving in various
mutuali fund schemes to generate current market value. The Security and
Exchange Board of India (Mutuali Funds) Regulations, 1996 define mutuali
fund “A fund establishment in the form of a trust to raise money through the
sale of units to the public or a section of the public under
one or more schemes for investing in securities, including money market
instruments." The main aim of mutuali fund is to construct portfolio which
diversify risk and provide maximum return from the market. Mutuali fund
industry is growing in a fastest pace because now most of

12
the sectors like FMCG, IT, Automobile etc are also involved in the trading
business of mutuali fund. Mutuali fund industry’s future is bright because there
are many opportunities available in the domestic as well as in global financial
market. The objective of mutuali fund is to attract small investors and introduce
them to market investments.
A mutuali fund refers to an investment option with the objective to earn more
returns with less risk and additional advantage of withdrawing money as and
when needed or required. The collected or pooled money is further invested by
professionals in diversified portfolio with an assumption to earn better returns in
future. Ultimately mutuali fund investments are subject to market risks.
Mutuali fund schemes are broadly classified as follows:
1. Equity funds: It refers to the funds that highly fluctuate in short span of
period but the return is also in this is high. Equity funds are also called
Stock funds.
2. Debt funds: In this investor has an option whether to invest for shorter
period of time or for longer period of time and the return the investor
would get is mostly fixed.
3. Hybrid funds: This is a mix of both Equity funds as well as Debt funds.

13
 1.3 – SIGNIFICANCE OF THE STUDY

The principal objective of every investor is to maximize his investments and to

earn more from his savings. Hence the key question of interest to us in this
study is whether the mutuali fund investments will have more advantages when
compared with other investments.

Nowadays, In India, mutuali fund industry is an attractive investment avenue

for investors particularly retail investor which facilitate them to invest and
construct their portfolio according to their requirements and it is an organized
financial system, accessible to individual investors having varied needs and
options. Mutuali Fund is one of the most preferred investment alternatives for
the small investors as it offers an opportunity to invest in a diversified,
professionally managed portfolio at a relatively low cost. A Mutuali Fund is a
thrust that pools the savings of a number of investors who share a common
financial goal. Over the past decade, mutuali funds have increasingly become
the investor’s vehicle of choice for long-term investing. Mutuali funds have
both advantages and disadvantages compared to direct investing in individual
securities. Today they play an important role in household finances.

Mutuali fund industry is expanded to a large scale where various mutuali fund
products are offered by various sectors like banking, automobile, FMCG, IT etc.
Several researches have been conducted in risk measuring techniques of mutuali
fund industry, in most of the research studies standard deviation, beta, Sharpe
ratio have been used to measure risk. So, present study emphasis on getting
aware of the various types of risk associated in the different types of mutuali
funds as to safeguard any portfolio losing profit with the help of risk measuring
instruments of mutuali fund. This particular study would help to understand the
present scenario and future opportunities of Mutuali Fund Industry and also
helps to compare the performance of various Mutuali Funds like Debt fund,
Equity fund, and Hybrid fund. Project would reveal various advantages and
disadvantages of risk measuring technique and to know appropriate risk
measuring techniques for mutuali fund. This study helps fund managers and
investors to identify the funds and construct their portfolio which would
minimizes the risk and maximize the return. The objective of providing
assistance to all the stakeholders of mutuali fund industry would be fulfilled
with this research work. This analytical project work would help to compare the
returns and risk of various schemes available in the market.

This study is useful to the investors to taking decisions relating to investments

in mutuali funds. By comparing the Blue-chip fund, Mid-cap, Small cap,
Balanced advantage fund, corporate bond fund, Banking and PSU debt fund,
Credit risk fund and ELS scheme in the area of risk and returns investor will

14
make decisions easily. The study has been done by using statistical tools like
Sharpe ratio, Standard Deviation and Beta function.

1.4 - STATEMENT OF PROBLEM

In today’s upcoming world people have a higher thought of investing their

salaries in various schemes of investment depending upon its future benefits.
Mutuali funds seem to be the most advanced upcoming investment needs has it
depends upon the market value, which may furnish a higher as well as lower
value of risk and return.

Mutuali Fund is an investment vehicle created with pooling of funds collected

from the scattered investors for the purpose of investing in stocks, bonds,
money market instruments or similar assets. In every mode of investment,
safety of the principal amount, with continuous returns and growth potential,
Mutuali funds have designed various financial instruments based on preference
of investors, their change in profile and even with changes in stock market. The
concept of Mutuali Funds is of recent origin. Some have benefited from it and
many are not even aware of such a mode of investment. Some of the investors,
with their limited knowledge on this mode, invest in it expecting return higher
than those provided under time deposits in commercial banks and if the
expected yield do not come up instead turn to backfire, they quit from this mode
and also demotivate new ones from entering. This study is conducted with the
aim to understand the extent of awareness of Mutuali Funds in Investors and
steps in familiarizing them among potential investors. At investors point of
view, the complete detail analysed was their perception towards it and how they
face the growth and the risk-return involved in it. People have to cogitate before
funding their money in different schemes of mutuali funds and should have a
comparative analysis of which plan has a higher profit of risk and return in both
past and future aspects.

Stock index forecasting is important for making informed investment decisions.

Events like the global financial crisis show that investing in the stock market
can potentially lead to high losses for the holder of common shares. Company
specific risk can be reduced by diversification. However, systematic market risk
that affects the entire stock exchange can have an outsized negative impact on
portfolio returns.

15
 1.5 - Literature Review

Pal & Chandani (2014) underwent a study of “A Critical Analysis of Selected

Mutuali Funds in India”. Under this study their main objective was to know the
performance of top 10 equity mutuali fund schemes in various categories,
the best mutuali fund house in Equity Mutuali Fund category, & finally to
compare the performance of top ten equity mutuali fund schemes according to
the performance parameters.

Venkataraman and Venkatesan (2016) – studied in their study titled

“Evaluation of Growth of Mutuali Funds and Exchange Traded Funds in India”
compared the performance of different schemes of mutuali fund companies on
the basis of risk and return so as to analyse the funds benchmarked to their
index and compare their performance to a common index & also to evaluate the
investment performance of the mutuali funds with respect to standard deviation,
Sharpe’s ratio, Treynor’s ratio and Jenson’s alpha.

Satheesh and Vetrivel (2016) – in their “comparative study on performance of

selected mutuali funds with reference to Indian context” attempted to discuss
the performance of selected mutuali funds schemes in various categories to help
retail investors in making decisions for various schemes in different categories.
Many risk management statistical tools are used to calculate risk in the mutuali
fund schemes which make the selection of fund easier for the retail investor.

16
 CHAPTER 2 PROJECT / TASK DETAILS

2.1 - OBJECTIVES OF PROJECT

• To study mutual funds, their types and various mutual fund schemes.

• To select the mutual fund schemes from each of equity, hybrid and debt
mutual funds.

• To analyze the returns of selected mutual fund schemes and compare it

with the benchmark data i.e. with the respective indices.

• To calculate risk by risk measurement tools such as Sharpe ratio and Beta
function.

• To compare the average risk pattern of Equity funds, Hybrid funds and
debt funds.

• To categorize the mutual funds according to risk appetite of the retail

investors.

17
 2.2 - METHODOLOGY

Methodology involves the secondary research of selected mutual funds of top

10 mutual funds houses in the Indian financial market and compared the returns
with respective indices. Every project needs proper plan and a stepwise process
research of the subjects. To study the risk involved in mutual fund schemes, a
stepwise procedure is applied which is as follows,

2.2.1 INTRODUCTORY READING OF MUTUAL FUNDS

Introductory reading of mutual funds is done from the websites such as
Investopedia where in the information of what is mutual funds, types of mutual
funds, various schemes of mutual fund is extracted and read out. Books such as
Romancing the balance sheet, Rich dad poor dad are referred. Blogs of Mr.
Safar niveshak, Vijay Kedia, Ashwath Damodaran, Vijay Malik has read to the
get the overview of the mutual fund industry and to know the current scenario
of the industry. Research papers are referred to know what researches has
already been made in this industry.

2.2.2 SCOPE DESIGN

Reading about the mutual funds and its industry scope of the project is been
found out. Scope of the project involves Understand the different Mutual Funds
performance in term of risk-return mix. Compare the performance of Mutual
Funds of different investment domain. Analyse the growth and development of
Indian mutual fund industry and to identify the challenges confronting by the
industry. Study the impact of high and unprecedented level of uncertainty on the
mutual funds.

2.2.3 PERCEIVED COURSES

Took up the course named ‘Financial Markets and Investments’. It is a market-
driven finance learning course that is developed to facilitate a smooth
understanding of the allocation of resources and the creation of liquidity for
businesses. The system of this market caters the smooth functioning of buying
and selling of security holdings. The floatation of money from investors to
borrowers and vice versa (repurchase process) is an important aspect of the
economic development of the country. Structural Transformation has been
experienced in the market when the market has adopted computer online trading
program and settlement procedures. The Security Analysis and Portfolio
Management have now become an integral part of the financial system as these
two subjects bring the ability of rational thinking into the investment process.

18
This course covers some aspects that show the relevance of these two
disciplines. The Securities Market and Trading Systems are described in this
course. This course focuses on the construction of a Portfolio, its revision and
evaluation are analysed in this course.
Another course taken is ‘Compare stocks returns with google sheets’ which
teaches how to compare the performance of different securities using financial
statistics (normal distributions) and the Google Sheets toolkit to decide which
one performed the best in terms of risk-to-return (risk-to-reward) metrics. This
course includes how risk management using quantitative analysis is done and is
applied in calculating mean returns of the stock, variance, standard deviation
and the Sharpe ratio.

2.3 - LIMITATIONS

1. The study is based on secondary data available from factsheets, websites,

as primary data was not accessible.
2. The research is based on exploratory research methodology and can have
sample bias.
3. Research is based only Indian mutual fund industry and might vary as we
move towards the west, due to investments, risk appetite and saving
pattern.
4. The study is conducted in short periods due to which study may not be
detailed in all aspects.
5. Expense ratio and Tax Rate is ignored.

19
 2.4 – MUTUAL FUND SCHEMES

• BLUE-CHIP FUNDS
• SMALL CAP FUND
• MID-CAP FUND
• ELSS
• BALANCED ADVANTAGE FUND
• CORPORATE BOND FUND
• CREDIT RISK FUND
• BANKING & PSU DEBT FUND

1. BLUE-CHIP FUND
A Blue-chip fund is a term used to indicate well-established and
financially sound companies. Blue chip funds invest in stocks of those
companies that have a credible track record with sound financials along
with regular dividend payments and profitability over the years. Blue
chip funds are known for enduring market downfalls than lesser known
companies. When faced with adverse market conditions, the Blue chip
can perform considerably better, which is also indicative of their
growth and stability. In a word, Blue chip funds offer reliability to the
investor’s portfolio. The blue-chip funds are usually expected to move
in the same range, and the broad market consists of more blue chips.
One can invest in both Blue chip funds and Blue chips ULIPs to benefit
from the financial growth of these established companies. Selected
blue-chip stocks are as follows:
1. Axis Blue-chip Fund - Dir - Growth
2. Canara Robeco Blue-chip Equity Fund - Dir - Growth
3. ICICI Prudential US Blue-chip Equity Fund - Dir - Growth
4. Franklin India Blue-chip - Dir - Growth
5. Kotak Blue-chip Fund - Dir - Growth
6. Indiabulls Blue Chip Fund - Dir- Growth
7. Principal Emerging Blue-chip Fund - Dir - Growth
8. SBI Blue-chip Fund - Dir - Growth
9. Mirae Asset Emerging Blue-chip Fund - Dir - Growth

20
2. SMALL CAP FUND
Small-cap funds typically include companies with market caps of less
than $2 billion. However, the dividing line can change and exact
definitions can vary between funds and brokerage houses. Generally
speaking, smaller companies are engaged in the early stages of business
operations. They’re presumed to have significant growth potential but
aren’t as financially stable or established as larger companies. Many
mutual funds cannot take large positions in small-cap stocks without
filing with the SEC, which has the added benefit of greater transparency.
Small-cap funds can be volatile because they invest in companies that are
less stable than large-cap companies. These funds can generate sharply
negative returns in times of market instability when less-established
companies can go out of business. On the other hand, they’re great
investment tools for market players who can tolerate risk and are
seeking aggressive growth. More conservative investors looking to
increase returns may want to allocate a portion of capital to these funds,
limiting risk through total exposure compared to the overall portfolio.
Selected small cap mutual funds are:
a. Aditya Birla Sun Life Small Cap Fund - Dir - Growth
b. Axis Small Cap Fund - Dir - Growth
c. Kotak Small Cap Fund - Dir - Growth
d. SBI Small Cap Fund - Dir - Growth
e. DSP Small Cap Fund - Dir - Growth
f. HDFC Small Cap Fund - Dir - Growth
g. HSBC Small Cap Equity Fund - Dir - Growth
h. Nippon India Small Cap Fund - Dir - Growth
i. Union Small Cap Fund - Dir - Growth

3. MID-CAP FUND
Mid-cap funds invest in companies with market caps of $2 billion to $10
billion. Mid-cap companies share some growth characteristics with small-
cap companies but generate less risk, at least in theory, because they’re
slightly larger and better established. Mid-cap funds don't always move in
tandem with the broad market and may be less vulnerable to violent
swings, compared to small caps. Mid-cap funds can be great investment
vehicles for investors seeking superior returns without the risk of small
caps or the downside of index-linked returns typical in large caps.
Selected mid-cap funds are :
a. Axis Midcap Fund - Dir - Growth

21
 b. Baroda Mid cap Fund - Dir - Growth
c. Quant Mid Cap Fund - Dir - Growth
d. Tata Mid Cap Growth Fund - Dir - Growth
e. UTI Mid Cap Fund - Dir - Growth
f. Aditya Birla Sun Life Mid Cap Fund - Plan A - Dir - Growth
g. BNP Paribas Mid Cap Fund - Dir - Growth
h. Edelweiss Mid Cap Fund - Dir - Growth
i. Sundaram Mid Cap Fund - Dir - Growth

4. ELSS
Equity Linked Savings Scheme, popularly known as ELSS are close-
ended, lock-in period of 3 years diversified equity schemes offered by
mutual funds in India. They offer tax benefits under the new Section 80C
of Income Tax Act 1961. ELSS can be invested using both SIP
(Systematic Investment Plan) and lump sums investment options. There
is a 3 years lock-in period, and thus has better Liquidity compared to
other options like NSC and Public Provident Fund. Selected ELS
schemes are:
a. Tata India Tax Savings Fund - Dir - Growth
b. Mirae Asset Tax Saver Fund - Dir - Growth
c. LIC MF Tax Plan - Dir - Growth
d. Axis Long Term Equity Fund - Dir - Growth
e. Nippon India Tax Saver (ELSS) Fund - Dir - Growth
f. Canara Robeco Equity Tax Saver Fund - Dir - Growth
g. HSBC Tax Saver Equity Fund - Dir - Growth
h. DSP Tax Saver Fund - Dir - Growth
i. Kotak Tax Saver Fund - Dir - Growth
j. IDFC Tax Advantage (ELSS) Fund - Dir - Growth

5. BALANCED ADVANTAGE FUND

A balanced advantage fund is hybrid mutual funds that combines equity

stock component, a bond component and sometimes a money market
component in a single portfolio. Generally, these hybrid funds stick to a
relatively fixed mix of stocks and bonds that reflects either a moderate, or
higher equity, component, or conservative, or higher fixed-income,
component orientation.
These funds invest in a mix of equities normally 60 percent and debt 40
percent, giving the investor the best of both worlds. These funds gain from a

22
 healthy dose of equities but the debt portion secure them against any
downturn. Selected funds are as follows:
a. Aditya Birla Sun Life Balanced Advantage Fund - Dir - Growth
b. Edelweiss Balanced Advantage Fund - Dir - Growth
c. HDFC Balanced Advantage Fund - Dir - Growth
d. ICICI Prudential Balanced Advantage Fund - Dir - Growth
e. L&T Balanced Advantage Fund - Dir - Growth
f. Nippon India Balanced Advantage Fund - Dir - Growth
g. Principal Balanced Advantage Fund - Dir - Growth
h. Invesco India Dynamic Equity Fund - Dir - Growth
i. IDFC Dynamic Equity Fund - Dir - Growth

6. CORPORATE BOND FUND

A corporate bond fund is essentially a mutual fund which invests more
than 80% of their total financial resources in corporate bonds. Business
organisations sell these to fund their short expenses, such as working
capital needs, advertising, insurance premium payments, etc. Corporate
bond funds are increasingly becoming a popular debt instrument for
businesses to raise required finances as associated costs are lower as
compared to bank loans. Selected corporate bond funds are:
a. Aditya Birla Sun Life Corporate Bond Fund - Dir - Growth
b. Canara Robeco Corporate Bond Fund - Dir - Growth
c. HDFC Corporate Bond Fund - Dir - Growth
d. ICICI Prudential Corporate Bond Fund - Dir - Growth
e. Kotak Corporate Bond Fund - Dir - Growth
f. Edelweiss Corporate Bond Fund - Dir - Growth
g. BNP Paribas Corporate Bond Fund - Dir - Growth
h. Invesco India Corporate Bond Fund - Dir - Growth
i. Sundaram Corporate Bond Fund - Dir - Growth
7. CREDIT RISK FUND
Credit risk funds are debt funds that lend at least 65% of their money to
not-so-highly rated companies. The borrowers pay higher interest charges
as a way to compensate for their lower credit rating, which translates into
a higher risk for the lender due to an increased possibility of default.
Although these funds lend mostly for short duration, they are still one of
the riskiest in the category. Some funds are:
a. Aditya Birla Sun Life Credit Risk Fund - Dir - Growth

23
 b. Axis Credit Risk Fund - Dir - Growth
c. Franklin India Credit Risk Fund - Dir - Growth
d. HDFC Credit Risk Debt Fund - Dir - Growth
e. Kotak Credit Risk Fund - Dir - Growth
f. Baroda Credit Risk Fund - Dir - Growth
g. DSP Credit Risk Fund - Dir - Growth
h. ICICI Prudential Credit Risk Fund - Dir - Growth
i. IDBI Credit Risk Fund - Dir - Growth
j. L&T Credit Risk Fund - Dir - Growth

8. BANKING & PSU DEBT FUND

Banking and PSU debt funds are often called as the best alternative to
bank deposits. These schemes mostly invest in bank certificates of
deposits or bonds and debentures of public sector companies. According
to the Sebi definition, the banking and PSU debt funds are open-ended
debt schemes predominantly investing in debt instruments of banks,
public sector undertakings and public financial Institutions. Selected psu
debt funds are :
a. Aditya Birla Sun Life Banking & PSU Debt Fund - Dir - Growth
b. Franklin India Banking & PSU Debt Fund - Dir - Growth
c. ICICI Prudential Banking & PSU Debt Fund - Dir - Growth
d. Nippon India Banking & PSU Debt Fund - Dir - Growth
e. Axis Banking & PSU Debt Fund - Dir - Growth
f. DSP Banking & PSU Debt Fund - Dir - Growth
g. Edelweiss Banking & PSU Debt Fund - Dir - Growth
h. IDFC Banking & PSU Debt Fund - Dir - Growth
i. Invesco India Banking & PSU Debt Fund - Dir - Growth
j. LIC MF Banking & PSU Debt Fund - Dir - Growth

2.5. Indices for comparing the selected mutual funds

1. NIFTY 50

2. Nifty small cap 100 TRI

3. Nifty midcap 100TRI
4. Nifty 200 TRI
5. NIFTY 50 Hybrid Composite Debt 65:35 Index

24
 6. Nifty corporate bond index
7. Nifty credit risk bond index
8. Nifty short-term bond index

2.6 - PERFORMANCE MEASURES USED IN THE STUDY

1. Standard Deviation (Total Risk)

Standard deviation is a statistical measurement that shows how much
variation there is from the arithmetic mean (simple average). Standard
deviation is the volatility of past mutual fund returns. In simple terms, a
greater standard deviation indicates higher volatility, which means the
mutual fund's performance fluctuated high above the average but also
significantly below it. Therefore, the terms volatility and standard
deviation are used interchangeably.
Standard deviation is calculated by taking the square root of the variance,
which itself is the average of the squared differences of the mean.

Standard deviation = sqrt {variance}

2. Beta
Beta measures the sensitivity of a portfolio against its benchmark, which
can be in the range of 1, >1 or <1 for equity funds, wherein 1 indicates
fund’s NAV will move in same direction as that of benchmark index and
that of less than 1 indicates the fund’s NAV would be less volatile than
the benchmark index. Beta is a risk ratio that investors use as a tool to
calculate, compare and predict returns. It utilizes benchmark indexes,
such as the BSE Sensex. And compares them against the individual
security to highlight a particular performance tendency. Beta is based on
the volatility in prices or trading, of the fund, something not measured by
alpha. But beta, too, is compared to a benchmark.
Beta coefficient(β)=Variance (Rm)/Covariance (Re, Rm)
OR
Beta coefficient (β) = Slope {Re, Rm}

25
 where:
Re=the return on an individual fund
Rm=the return on the market index
Covariance=changes in a stock’s returns arerelated to changes in the mar
ket’s returns
Variance=Deviation of data points from their average value

3. Systematic risk
Systematic risk is that risk which leads to variation in returns of the
portfolio due to macro-economic and market factors. Some of these
factors are changes in interest rates and inflation rates in an economy, or
any risk that arises due to the political environment, changes in the
government policy or any natural disasters. These factors affect the entire
market. This is a type of risk that the fund managers and investors do not
have much control on. In other words, they are market risks.

4. Sharpe Ratio
Sharpe ratio measures the extra return a fund has generated relative to the
risk taken. The higher the sharpe ratio, the better a fund’s return in lieu of
the risk. Sharpe ratio is a measure of excess portfolio return over the risk-
free rate relative to its standard deviation. If two funds offer similar
returns, the one with higher standard deviation will have a lower Sharpe
ratio. To compensate for the higher standard deviation, the fund needs to
generate a higher return to maintain a higher Sharpe ratio
It is calculated as,
Sharpe ratio = (Return of the fund – Risk free rate of return) / Standard
Deviation
Similarly, the same steps were exercised with Benchmarked indices as
well to know and analyse the Returns, risk and their sharpie ratio. The

26
 risk free rate taken in this study was 5.80% which was the 90 day
treasury bill rate as on 12/8/20.

5. Unsystematic Risk
Unsystematic risk is defined as a risk that is unique to a particular asset
class and can be eliminated or reduced by diversifying a portfolio.
Unsystematic risk is the risk that is specific to a stock or a sector. This
arises due to the risk inherent in the business or due to any specific reason
attributable to a company. While this risk is often mitigated by diligent
stock selection and monitoring by fund managers, for investors,
diversification across a portfolio of stocks (through mutual funds) and
diversifying across market caps (through diversified funds or a holding of
large, mid and multi-cap funds) is a good way to reduce this risk.

6. Net Asset Value (NAV)

Net Asset Value (NAV) is the market value of a mutual fund unit. The
overall cost of a mutual fund depends on this market value per fund unit.
NAV is the addition of the market value of all the shares in the fund and
divide by the number of total mutual fund units. NAV is simply the price
per share of the fund.
It is calculated as,
Net Asset Value = [Assets – (Liabilities + Expenses)] / Number of
outstanding units

27
 Chapter – 3 Data Findings and Analysis

1. BLUE-CHIP FUND

STANDARD
FUNDS RETURNS SHARPE BETA
DEVIATION
Axis Blue-chip
Fund - Dir - 10.27% 0.12 5.27% 0.73
Growth
Canara Robeco
Blue-chip Equity
8.16% 0.09 6.00% 0.87
Fund - Dir -
Growth
ICICI Prudential
US Blue-chip
16.44% 0.23 4.48% 0.63
Equity Fund - Dir -
Growth
Franklin India
Blue-chip - Dir - -0.25% -0.01 6.79% 0.98
Growth
Kotak Blue-chip
Fund - Dir - 3.33% 0.03 6.70% 0.97
Growth
Indiabulls Blue
Chip Fund - Dir- 3.41% 0.01 4.80% 0.93
Growth
Principal Emerging
Blue-chip Fund - 2.22% 0 5.41% 0.88
Dir - Growth
SBI Blue-chip
Fund - Dir - 2.30% 0 4.93% 0.95
Growth
Mirae Asset
Emerging Blue-
6.16% 0.06 5.39% 1.01
chip Fund - Dir -
Growth

28
 2. MID-CAP FUND

STANDARD
FUNDS RETURNS SHARPE BETA
DEVIATION
Axis Midcap Fund -
9.85% 0.12 5.49% 0.73
Dir - Growth
Baroda Mid cap
-0.04% -0.02 6.21% 0.83
Fund - Dir - Growth
Quant Mid Cap
3.32% 0.03 6.13% 0.78
Fund - Dir - Growth
Tata Mid Cap
Growth Fund - Dir - 2.07% 0.01 6.87% 0.85
Growth
UTI Mid Cap Fund
-0.81% -0.03 6.89% 0.91
- Dir - Growth
Aditya Birla Sun
Life Mid Cap Fund - -5.91% -0.1 6.13% 0.86
Plan A - Dir - Growth

BNP Paribas Mid

-0.46% -0.03 5.53% 0.82
Cap Fund - Dir - Growth

Edelweiss Mid Cap

1.14% -0.01 5.93% 0.81
Fund - Dir - Growth
Sundaram Mid Cap
-5.06% -0.08 6.28% 0.87
Fund - Dir - Growth

29
 3. SMALL CAP FUND

STANDARD
FUNDS RETURNS SHARPE BETA
DEVIATION

Aditya Birla Sun Life

Small Cap Fund - Dir - -11.40% -0.13 7.74% 0.82
Growth

Axis Small Cap Fund -

4.78% 0.06 6.74% 0.68
Dir - Growth
Kotak Small Cap Fund -
-2.55% -0.03 7.39% 0.76
Dir - Growth
SBI Small Cap Fund -
4.60% 0.06 7.22% 0.86
Dir - Growth
DSP Small Cap Fund -
-5.70% -0.08 7.00% 0.94
Dir - Growth
HDFC Small Cap Fund
-3.03% -0.04 6.59% 0.73
- Dir - Growth

HSBC Small Cap

Equity Fund - Dir - -7.44% -0.08 7.68% 0.98
Growth

Nippon India Small Cap

-1.60% -0.02 6.72% 0.92
Fund - Dir - Growth

Union Small Cap Fund

-3.73% -0.06 6.15% 0.68
- Dir - Growth

30
 4. ELSS

STANDARD
FUNDS RETURNS SHARPE BETA
DEVIATION
Tata India Tax Savings
2.71% 0.02 6.55% 0.39
Fund - Dir - Growth
Mirae Asset Tax Saver
6.91% 0.07 6.55% 0.99
Fund - Dir - Growth
LIC MF Tax Plan - Dir -
2.54% 0.02 6.20% 0.80
Growth
Axis Long Term Equity
7.07% 0.08 5.97% 0.88
Fund - Dir - Growth

Nippon India Tax Saver

(ELSS) Fund - Dir - -9.29% -0.1 7.46% 1.00
Growth

Canara Robeco Equity

Tax Saver Fund - Dir - 6.93% 0.07 5.10% 0.85
Growth

HSBC Tax Saver Equity

-1.27% -0.04 5.86% 0.96
Fund - Dir - Growth

DSP Tax Saver Fund -

3.84% 0.03 5.71% 0.97
Dir - Growth
Kotak Tax Saver Fund -
3.62% 0.02 5.59% 0.91
Dir - Growth

31
 5. BALANCED ADVANTAGED FUND

STANDARD
FUNDS RETURNS SHARPE BETA
DEVIATION
Aditya Birla Sun Life
Balanced Advantage 5.68% 0.06 5.27% 0.66
Fund - Dir - Growth
Edelweiss Balanced
Advantage Fund - Dir - 9.06% 0.11 3.92% 0.89
Growth
HDFC Balanced
Advantage Fund - Dir - 3.91% 0.03 6.77% 1.85
Growth
ICICI Prudential
Balanced Advantage 7.45% 0.08 5.10% 0.80
Fund - Dir - Growth
L&T Balanced
Advantage Fund - Dir - 8.50% 0.11 3.78% 0.37
Growth
Nippon India Balanced
Advantage Fund - Dir - 6.04% 0.05 4.65% 1.20
Growth
Principal Balanced
Advantage Fund - Dir - 5.29% 0.05 2.71% 0.40
Growth
Invesco India Dynamic
Equity Fund - Dir - 4.16% 0.04 5.21% 1.43
Growth
IDFC Dynamic Equity
8.27% 0.1 4.55% 0.73
Fund - Dir - Growth

32
 6. CORPORATE BOND FUND

STANDARD
FUNDS RETURNS SHARPE BETA
DEVIATION
Aditya Birla Sun Life
Corporate Bond Fund - 9.17% 0.76 0.53% 0.66
Dir - Growth
Canara Robeco
Corporate Bond Fund - 8.41% 0.6 0.59% 0.92
Dir - Growth
HDFC Corporate Bond
9.18% 0.64 0.64% 0.97
Fund - Dir - Growth
ICICI Prudential
Corporate Bond Fund - 8.83% 0.72 0.53% 1.04
Dir - Growth
Kotak Corporate Bond
8.95% 0.99 0.39% 0.78
Fund - Dir - Growth
Edelweiss Corporate
Bond Fund - Dir - 3.23% -0.01 2.37% 0.94
Growth
BNP Paribas Corporate
Bond Fund - Dir - 5.54% 0.07 2.07% 0.14
Growth
Invesco India Corporate
Bond Fund - Dir - 7.48% 0.33 0.80% 2.14
Growth
Sundaram Corporate
Bond Fund - Dir - 8.89% 0.44 0.87% 1.46
Growth

33
 7. CREDIT RISK FUND

STANDARD
FUNDS RETURNS SHARPE
DEVIATION
Aditya Birla Sun Life
Credit Risk Fund - Dir - 5.87% 0.19 0.89%
Growth
Axis Credit Risk Fund -
6.76% 0.3 0.78%
Dir - Growth

Franklin India Credit Risk

3.61% -0.01 1.24%
Fund - Dir - Growth

HDFC Credit Risk Debt

7.60% 0.39 0.74%
Fund - Dir - Growth

Kotak Credit Risk Fund -

7.40% 0.37 0.73%
Dir - Growth
Baroda Credit Risk Fund -
3.21% -0.04 1.01%
Dir - Growth
DSP Credit Risk Fund -
2.43% -0.11 0.99%
Dir - Growth

ICICI Prudential Credit

8.69% 0.8 0.47%
Risk Fund - Dir - Growth

IDBI Credit Risk Fund -

-1.19% -0.16 2.46%
Dir - Growth

34
 8. BANKING & PSU DEBT FUND

STANDARD
FUNDS RETURNS SHARPE BETA
DEVIATION
Aditya Birla Sun Life
Banking & PSU Debt 9.00% 0.64 0.62% 1.48
Fund - Dir - Growth
Franklin India Banking
& PSU Debt Fund - Dir - 9.36% 0.67 0.63% 1.13
Growth
ICICI Prudential
Banking & PSU Debt 8.15% 0.53 0.63% 1.77
Fund - Dir - Growth
Nippon India Banking &
PSU Debt Fund - Dir - 9.31% 0.64 0.65% 1.25
Growth
Axis Banking & PSU
Debt Fund - Dir - 9.58% 0.73 0.60% 0.70
Growth
DSP Banking & PSU
Debt Fund - Dir - 9.06% 0.6 0.65% 1.16
Growth
Edelweiss Banking &
PSU Debt Fund - Dir - 10.51% 0.43 1.17% 1.09
Growth
IDFC Banking & PSU
Debt Fund - Dir - 9.91% 0.66 0.70% 0.90
Growth
Invesco India Banking &
PSU Debt Fund - Dir - 9.05% 0.38 1.05% 0.74
Growth

35
 Returns of selected mutual fund schemes

RETURNS
20.00%

15.00%

10.00%

5.00%

0.00%
FUND-1 FUND-2 FUND-3 FUND-4 FUND-5 FUND-6 FUND-7 FUND-8 FUND-9 INDEX
-5.00%

-10.00%

-15.00%

BLUECHIP_FUND SMALLCAP MID CAP CORPORATE_BOND

CREDIT_RISK BANKING&PSU ELSS BALANCED-ADV

Standard deviation of selected mutual fund schemes

STANDARD DEVIATION
9.00%

8.00%

7.00%

6.00%

5.00%

4.00%

3.00%

2.00%

1.00%

0.00%
FUND-1 FUND-2 FUND-3 FUND-4 FUND-5 FUND-6 FUND-7 FUND-8 FUND-9

BLUECHIP_FUND SMALLCAP MID CAP ELSS

BALANCED ADV CORPORATE CREDIT_RISK BANKING&PSU

36
 Sharpe ratio of selected mutual fund schemes

SHARPE RATIO
1.2

0.8

0.6

0.4

0.2

0
FUND-1 FUND-2 FUND-3 FUND-4 FUND-5 FUND-6 FUND-7 FUND-8 FUND-9
-0.2

-0.4

BLUECHIP_FUND SMALLCAP MID CAP ELSS

BALANCE-ADV CORPORATE_BOND CREDIT RISK BANKING&PSU

Beta function of selected mutual fund

schemes
BETA FUNCTION
2.5

1.5

0.5

0
FUND-1 FUND-2 FUND-3 FUND-4 FUND-5 FUND-6 FUND-7 FUND-8 FUND-9

BLUECHIP_FUND SMALLCAP MID CAP CORPORATE_BOND

BANKING&PSU ELSS BALANCED-ADV

37
 3.2. Data Analysis

A) Absolute Returns of 3 years of each mutual fund schemes is calculated

and categorize and tabulate in the highest and lowest returns giving
schemes as below.

RETURNS
CATEGORY
HIGHEST LOWEST

EQUITY- 16.44% (ICICI 0.25% (FRANKLIN

LARGECAP PRUDENTIAL BLUE-CHIP) INDIA)

SMALL-CAP (-11.40%) (ADITYA

4.78% (AXIS SMALL CAP)
FUND BIRLA)
MID- (-5.91%) (ADITYA
9.85%(AXIS)
CAP_FUND BIRLA)
CORPORATEB
9.18%(HDFC) 3.23%(EDELWEISS)
OND
CREDIT RISK 8.69 (ICICI PRUDENTIAL) (-1.19) (IDBI)

BANKING & 8.15% (ICICI

10.51%(EDELWEISS)
PSU PRUDENTIAL)
(-9.29%)
7.07%(AXISLONGTERME
ELSS (NIPPONINDIA_TAX_S
QUITY_F)
AVER_F)
BALANCE
9.06% (Edelweiss) 3.91% (HDFC)
ADVANTAGE

Among the selected schemes, blue-chip funds gave the highest returns i.e.
16.44% and small cap funds gave the lowest i.e. negative returns of 11.40%.

38
 B) Sharpe ratio is calculated of equity, hybrid and debt funds to check the
how the funds perform against risk free returns provided the per unit risk.

SHARPE RATIO
CATEGORY
HIGHEST LOWEST

(-0.1)
EQUITY- 0.23(ICICI PRUDENTIAL
(INDIABULLS
LARGECAP BLUE-CHIP)
BLUE-CHIP)

(-0.13) (ADITYA
SMALL-CAP FUND 0.06(AXIS&SBI)
BIRLA

(-0.1) (ADITYA
MID-CAP_FUND 0.12(AXIS)
BIRLA)

(-0.01)
CORPORATEBOND 0.99(KOTAK)
(EDELWEISS)

CREDIT RISK 0.8(ICICI PRUDENTIAL) (-0.16) (IDBI)

BANKING&PSU 0.75(LIC) 0.38(INVESCO)

ELSS 0.08(AXIS) (-0.1) (NIPPON)

BALANCE
0.11(EDELWEISS, L&T, IDFC) 0.03(HDFC)
ADVANTAGE

Debt funds have the highest Sharpe ratio among the selected mutual fund
schemes such as corporate bond fund, credit risk fund and banking and psu
fund. Scheme of IDBI mutual fund house which is a credit risk bond fund has
the lowest Sharpe ratio among the funds.

39
 C) Beta has calculated to check the volatility of the funds. Respective
indices have selected to calculate he beta function of various selected
schemes.

BETA
CATEGORY
HIGHEST LOWEST
0.63(ICICI
1.01(MIRAE BLUE-
EQUITY-LARGECAP PRUDENTIAL
CHIP FUND)
BLUE-CHIP)
SMALL-CAP FUND 0.98(HSBC) 0.68(AXIS)

MID-CAP_FUND 0.91(UTI) 0.73(AXIS)

0.14(BNP
CORPORATEBOND 1.77(INVESCO)
PARIBHAS)
CREDIT RISK

1.77(ICICI
BANKING&PSU 0.66(LIC)
PRUDENTIAL)

ELSS 0.99(MIRAE) (0.39) (TATA)

BALANCE ADVANTAGE 1.85(HDFC) 0.37(L&T)

In Hybrid funds, balanced advantage fund of HDFC mutual fund house has the
highest beta function i.e. has the highest volatility and ELSS equity fund has the
lowest volatility.

40
 D) Standard deviation is the measure of the total risk involved in the fund. It
is the deviation from the average returns of defined duration of the funds.

STANDARD DEVIATION
CATEGOEY
HIGHEST LOWEST

4.48% (ICICI
EQUITY- 6.79(FRANKLIN
PRUDENTIAL BLUE-
LARGECAP INDIA)
CHIP)

6.79(FRANKLIN
SMALL-CAP FUND 4.48(ICICI PRUDENTIAL
INDIA)

MID-CAP_FUND 6.89(UTI) 5.49(AXIS)

CORPORATEBOND 2.37(EDELWEISS) 0.39(KOTAK)

0.47% (ICICI
CREDIT RISK 2.46%(IDBI)
PRUDENTIAL)

BANKING&PSU 1.17%(EDELWEISS) 0.55%(LIC)

ELSS 7.46%(NIPPON) 5.10%(CANARAREBECO)

BALANCE
6.77%(HDFC)
ADVANTAGE
3.92%(EDELWEISS)

Equity funds has the highest standard deviation i.e. total risk of the fund and
corporate bond fund has the lowest risk among the selected funds.

41
 CHAPTER 4 - CONCLUSIONS & RECOMMENDATIONS

4.1 - CONCLUSIONS

1. Corporate bond funds have better risk adjusted returns as the Sharpe ratio is
the highest among all.
2. As the graph shows, Indices are barely beating the respective funds in long
term.
3. Blue-chip funds gave the highest returns among the selected funds category.
4. Banking & PSU funds gave the constant returns of an average of 9% yearly.
Also same with the other debt funds.
5. Small cap funds did not perform well in long term.
6. Total risk involved in the small and midcap funds are the highest.
7. People who want to invest for shorter period like 2 – 3 years, They should
invest under debt mutual funds, as risk is lesser than equity mutual funds
8. Equity and hybrid mutual funds are made for the investors who want to
invest for long term.

42
 4.2 - RECOMMENDATIONS

a. Aggressive investors who want to gain high returns at the cost of high
risk and for a long-term, equity funds and hybrid funds are best suited for
them as seen above the highest calculated risk among all the funds equity
and hybrid funds have the highest risk. Among the 9 mutual fund houses
ICICI prudential blue-chip fund has the highest return which 16.44%
in 3 years.

b. Investors who have little experience of investing in mutual funds should

go for mid-cap and small cap mutual funds because these companies
invest in the small and mid-cap companies and if that companies become
successful large companies, you will make money and if these companies
don’t fulfill their promise as many companies have dubious management
and lack of vision result of these hits the rough patch and it may take
long time to bounce back. This is the risk investors take investing in the
small and mid-cap funds. Among the selected mid-cap and small cap
funds highest returns giving funds are AXIS mid-cap and AXIS small
cap funds.

c. Equity linked saving schemes is the tax saving mutual fund, it qualify to
tax deductions of Rs. 1.5 lakhs in financial year. Investors having a
higher risk-tolerance and long-term financial goals consider ELSS to save
taxes. AXIS long term equity fund has the highest returns among the
mutual fund houses.

d. Risk adjusted returns i.e. the funds which have higher Sharpe ratio are the
debt funds. These funds have lesser risk than equity and hybrid funds but
have high beta function i.e. volatility is high so these funds are
recommended for short term gains. Following are the schemes which
have higher risk adjusted returns among the selected debt funds;

In Corporate bond funds:

HDFC corporate bond fund

In Credit Risk bond fund:

ICICI Prudential credit risk fund

In Banking and PSU debt fund:

43
Edelweiss banking and psu debt fund

Debt funds investment selection decision can not be taken only by doing
Quantitative risk analysis. These schemes needed qualitative analysis as
well the reason of which are these funds invest in bonds and debt
instruments having ratings ranging from AAA to BBB. These ratings are
applicable for a year only and it may change time. Hence decision is
taken by doing quantitative as well as qualitative analysis.

44
 ANNEXURES

A-1 WEBLIOGRAPHY

• https://www.amfiindia.com/
• https://www.mutualfundindia.com/
• https://www.nseindia.com
• https://www.investopedia.com/

• https://economictimes.indiatimes.com/wealth/invest/how-to-identify-
calculate-risk-in-stocks-using-ms-
excel/articleshow/69608883.cms?utm_source=contentofinterest&utm_me
dium=text&utm_campaign=cppst

• http://ndl.iitkgp.ac.in/document/MDl5cHdNUUlnd0lnZHNoQXlvOG5lT
VY2L3N0VVN1Wk5zQnlKZzlzWDZLST0

• https://economictimes.indiatimes.com/mf/analysis/looking-for-safe-debt-
funds-here-are-34-schemes-for-
you/articleshow/77013541.cms?from=mdr

• http://www.ijetsr.com/images/short_pdf/1522136342_1458-1462-
oucip930_ijetsr.pdf

45