Performance Evaluation of Mutual Funds: A study of Selected Midcap Equity Mutual Funds in India

Abstract

A mutual fund is a trust that pools the savings of a number of investors who share a common financial goal. The money thus collected is then invested in capital market instruments such as shares, debentures and other securities. The income earned through these investments and the capital appreciation realized is shared by its unit holders in proportion to the number of units owned by them. Thus, a mutual fund is the most suitable investment for the common man as it offers an opportunity to invest in a diversified, professionally managed basket of securities at a relatively low cost.
In this research paper an attempt is made to analyse the performance of the growth-oriented equity midcap schemes on the basis of return and risk evaluation. The analysis was achieved by assessing various financial tests like Annualised Return, Sharpe Ratio, Treynor Ratio and Jensen’s Ratio. The data has been taken from various websites of mutual fund schemes and from amfiindia.com. The analysis depicts that majority of funds selected for study have outperformed for 1 year and 5 years annualised returns. Axis blue-chip Midcap, Invesco India Midcap and Kotak Emerging Equity Fund have outperformed on the basis of Sharpe, Treynor and Jensen’s measure of performance.