FINANCIAL PERFORMANCE OF SELECTED MUTUAL FUNDS IN INDIA
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Date
2010-07-13
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University of Agricultural Sciences, Bangalore
Abstract
Unit trust of India was the first government organization that entered into the
portals of new investment avenue called Mutual Fund. The Mutual fund industry in
India saw a robust growth and currently hold the portfolio of assets worth
Rs.8,07,546. The study is based on primary and secondary data. The primary data
was collected from investors across Bangalore city through structured schedule. The
secondary data related to Net Asset Values and returns was collected from the
websites amfi.com and rediffmoney.com. It focused on the return on investment from
various investment options, Viz., mutual funds, stocks, bullion and bank fixed
deposits, classified under risk-return criteria by grouping under high risk-high return,
medium risk-medium return and low risk- low return categories. The analysis is being
carried out by taking rupees one lakh investment for the period of one year. The rate
of return of mutual funds is very high (99.37%) in the high risk-high return category
when compared to index based stocks [NSE (44.12%) & BSE (45.42%)], gold (21.98%),
silver (32.71%) and bank fixed deposits (7.75%). In the medium risk-medium return
category, the rate of return of mutual funds is slightly lower (37.96%) than the stocks
but higher than the bullion i.e. gold, silver and bank fixed deposit. In the low risk-low
return category the rate of return of mutual funds is lower (34.25%) than stocks and
gold but higher than silver and bank fixed deposit. The investors’ perception towards
the mutual funds is encouraging since most of the young, qualified and fixed income
earners prefer to invest in mutual funds over other investment opportunities. Many
investors are cautious and would like to invest bank promoted mutual funds. The
drivers of mutual fund investments are tax benefits, capital appreciation, liquidity and
risk insulation.
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