Profitability and Riskiness of mutual funds in India

Ing. Divyansh Sharma

Master's thesis

Abstract:

Mutual funds are one of the trendy and fast-expanding investment choices provided by the financial market It is the faith of group investors who believe in a common financial goal and get their money invested via mutual funds in the stock market, debentures, and other securities. In the future, these investors get a share of the income generated by such kinds of investments through unit holders in proportion to the number of units they own. Despite this tremendous growth in mutual funds, some critical challenges still exist. Among these challenges, low levels of customer awareness, meager retail sector participation, riskiness, and the assurity of mutual funds' profitability are widespread. To investigate and examine two significant challenges in mutual funds, profitability and riskiness, the author in the present work proposed to conduct a comprehensive study of various mutual fund schemes already implemented in India in order to evaluate their performance by using the most popular portfolio performance evaluation model, namely Sharpe, Treynor, Jensen and rolling window approach. This study has focused on four large-cap mutual funds. The large-cap mutual funds are Canara Robeco Blue Chip Equity, Edelweiss Large Cap Fund, HDFC Top 100 Fund and Axis Bluechip Fund – Growth.This work’s primary focus is on four large-cap mutual funds, explaining them in depth and their critical analysis. The present study will assist research scholars and financial professionals in analyzing the various mutual fund schemes to finalize their decision on picking the appropriate investment option from a galaxy of investment options. Eventually, the present attempt has been made to find the answers to questions like the growth rate of a selected mutual fund in India and the maximum return.

Abstract:

Mutual funds are one of the trendy and fast-expanding investment choices provided by the financial market It is the faith of group investors who believe in a common financial goal and get their money invested via mutual funds in the stock market, debentures, and other securities. In the future, these investors get a share of the income generated by such kinds of investments through unit holders in proportion to the number of units they own. Despite this tremendous growth in mutual funds, some critical challenges still exist. Among these challenges, low levels of customer awareness, meager retail sector participation, riskiness, and the assurity of mutual funds' profitability are widespread. To investigate and examine two significant challenges in mutual funds, profitability and riskiness, the author in the present work proposed to conduct a comprehensive study of various mutual fund schemes already implemented in India in order to evaluate their performance by using the most popular portfolio performance evaluation model, namely Sharpe, Treynor, Jensen and rolling window approach. This study has focused on four large-cap mutual funds. The large-cap mutual funds are Canara Robeco Blue Chip Equity, Edelweiss Large Cap Fund, HDFC Top 100 Fund and Axis Bluechip Fund – Growth.This work’s primary focus is on four large-cap mutual funds, explaining them in depth and their critical analysis. The present study will assist research scholars and financial professionals in analyzing the various mutual fund schemes to finalize their decision on picking the appropriate investment option from a galaxy of investment options. Eventually, the present attempt has been made to find the answers to questions like the growth rate of a selected mutual fund in India and the maximum return.

Keywords

Mutual Funds, Investment, Risk, Returns, Sharpe Ratio, Treynor Ratio, Jensen Ratio

Language used: English

Date on which the thesis was submitted / produced: 13. 5. 2022

Thesis defence

• Date of defence: 22. 6. 2022
• Supervisor: Ing. Tomáš Plíhal, Ph.D.
• Reader: Ph.D. Oleg Deev

Masaryk University

Faculty of Economics and Administration

Master programme / field:
Finance / Finance