Mutual Funds in India

and their
Performance
PARMINDER SINGH SAINI
MMS B
 Mutual Funds
Collects the savings and pools it together to create a
larger resource of money.
Different types of securities depending upon the
objective of the scheme.
Securities could be shares to debentures to money
market instruments.
 HISTORY OF MF IN INDIA
 MF INDUSTRY STARTED IN INDIA IN 1963 WITH
FORMATION OF UTI
DIFFERENT PHASES :

 PHASE -1 – 1964-87- (UTI)

 PHASE-2 – 1987-1993- (ENTRY OF PUBLIC SECTOR MFs)
 PHASE-3 – 1993-2003- (ENTRY OF PRIVATE MFs)
 PHASE-4 – since 2003- (UNDER SEBI REGULATION)
Advantages of Mutual Fund
Portfolio Diversification
Professional Management
Less Risk
Low Transaction Costs
Choice of Schemes
Transparency
 Disadvantage of Mutual Funds

No Customized Portfolios

Difficulty in Selecting a Suitable Fund Scheme
No Guarantees
Costs Control not in the Hands of an Investor
 TYPES OF FUNDS
Open-ended Fund
 UNITS AVAILABLE FOR SALE AND REPURCHASE AT ALL TIMES.
 INVESTORS CAN BUY OR REDEEM ON NAV.

Close-ended Fund
 Stipulated maturity period e.g. 5-7 years.
 Fund is open for subscription only during a specified period at the time
of launch of the scheme.
 Schemes according to Investment
Objective
Growth Oriented
Scheme
Income Oriented
Scheme
Balanced Fund
Gilt Fund
Index Funds
Sector specific funds
 PERFORMANCE OF MUTUAL FUNDS

Change in NAV
 Change in NAV between the two dates in absolute and
percentage terms.
 Absolute terms-{NAV at the end-NAV at the
beginning}
 Percentage terms- {(Absolute change/NAV at the
beginning)*100

Easily understood & applies to any type of

fund.
Does not take into account interim dividend.
 PERFORMANCE OF MUTUAL FUND

BETA- compares a mutual fund's volatility with that

of a benchmark.

ALPHA- measure of a mutual fund's risk relative to

the market.

SHARPE RATIO- ratio of returns generated by the

fund over and above risk free rate of return and the
total risk associated with it (standard deviation).
 COMPARISON OF BETA RATIO

BETA
1

0.98

0.96

0.94
BETA
0.92

0.9

0.88

0.86

0.84
UTI EQUITY FUND HDFC TOP 200 PRU ICICI GROWTH RELIANCE VISION

the betas of nearly all the funds are similar apart from
the beta of Pru-ICICI Growth, which has a very high beta,
which implies that the fund is very volatile. 
COMPARISON OF ALPHA RATIO
2.5

1.5

ALPHA
1

0.5

0
UTI EQUITY FUND HDFC TOP 200 PRU ICICI GROWTH RELIANCE VISION

alpha of the Reliance Vision is highest i.e. 2.27

 COMPARISON OF SHARPE
RATIO
SHARPE RATIO
0.6

0.58

0.56

0.54 SHARPE RATIO

0.52

0.5

0.48

0.46
UTI EQUITY FUND HDFC TOP 200 PRU ICICI GROWTH RELIANCE VISION

Sharpe ratio for reliance vision is highest which shows

that reliance vision mutual funds will give better returns
than other three mutual fund schemes.
THANK YOU