Performance Evaluation of Top 10 Mutual Funds in India

Abstract

Mutual Fund is professionally managed trust that pools the money of various investors and further invests them into different securities like shares, bonds and short term securities like certificate of deposit, commercial paper etc. and commodities like precious metals. In India the origin of Mutual Funds industry can be traced since the enactment of UTI (Unit Trust of India) Act, 1963.Due to various historic reasons the unit trust of India has enjoyed the monopoly in the mutual funds industry and it still maintains its prominent position. Indian Mutual Fund Industry has grown tremendous over the last two decade after the entry of public sector banks, insurance companies, private and foreign players into the industry. The study evaluates the performance of Top 10 mutual funds as per Crisil September, 2014 ranking and also compares it with the benchmark index i.e. S&P CNX Nifty. Various absolute and relative performance measures like sharp measure, treynor measure and Jensen Alpha is being used to compare the performance. The study finds that overall all the schemes provide higher and better average return than the market. Franklin India Opportunities Fund is the best performer with higher average return, lower risk which is good for investors who wants to reap higher returns at a lower risk.