A study on performance of selected large cap mutual funds in India

Abstract

Mutual funds are introduced in the Indian financial system with a view to providing comparatively safer investments at the doorstep of common investors. This study has tried to understand the performance of selected large-cap mutual funds in India. For study purposes, five large cap mutual funds have been selected. The secondary data has been considered for the performance analysis, and it was achieved by using various tools and techniques like Average return, Standard deviation, Beta, Sharpe ratio, Jensen ratio, and Treynor ratio. The findings show that SBI Bluechip Fund, Canara Robeco Bluechip Fund, and Kotak Bluechip Fund outperformed the other funds. A mutual fund is a scheme in which several people invest their money for a common financial cause. The collected money is invested in the capital market, and the money earned is divided based on the number of units they hold. The mutual fund industry started in India in a small way with the UTI Act, which created what was effectively a small savings division within the RBI. Over a period of 25 years, this grew fairly successfully and gave investors a good return, and therefore, in 1989, as the next logical step, public sector banks and financial institutions were allowed to float mutual funds, and their success emboldened the government to allow the private sector to foray into this area. The advantages of mutual funds are professional management, diversification, economies of scale, simplicity, and liquidity.