In India, currently, there square measure many of the mutual funds are jointly investment companies operating each within the public sector yet as within the private sector sector. These contend with alternative one another for mobilizing the investment with individual investors and other organizations appetent of inserting their funds with these non-depository financial institution investment company would really like to grasp the comparative performance of every thus on choose the simplest mutual fund or investment company. For this, analysis of the performance of mutual funds and their schemes is critical.
PERFORMANCE MEASURES OF MUTUAL FUNDS
In order to see the risk adjusted returns of investing portfolio, many eminent authors have done many things since 1960’s to develop composite performance indices to judge a portfolio by comparing alternative portfolio within a particular risk class. The most important and widely accepted measuring the performance of Mutual Funds are:
1 The Treynor’s Measure
2 The Sharpe’s Measure
3 The Jenson’s Model
MEASURING MUTUAL FUNDS RETURN
The primary phase in mutual fund assessment is calculation of the rate of return attained above the holding period. Return may be defined to comprise deviations in the value of the mutual fund over the holding mutual fund and any revenue gained over that period. However, in the mutual funds, throughout the holding period, Cash inflows into the amount and cash drawings from the amount may happened. The unit-value method may be used to find the return in this study.
The one time ratio of return, r, for a mutual fund may then be defined as the change in the per unit net asset value (NAV), plus it’s per unit cash disb...
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p = Rp - Rp
Rp = Rf+ p ( Rm - Rf)
Jp = Jensen’s Ratio
p = The intercept
p = A measure of systematic risk
Rp = Average return of portfolio
Rf = Risk free rate of return
Rm = Average market return
Rm is average market return during the given period.
Fro is the risk free rate of return
In this section, an attempt is made to measure the performance of selected mutual funds. For this purpose the models developed by Sharpe, Trey nor and Jenseen were used. Before taking up this, the details about returns of selected funds are presented. In addition, to have an idea about volatility of funds to market return, the Beta values and standard deviation values are calculated.
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