Valuation of Mutual Funds: A Case Study of Equity Linked Savings Schemes in India

Abstract

India has became the top growing markets for mutual funds since 2004, witnessing a CAGR of 29 percent in the five-year period from 2004 to 2008 as against the global average of          4 percent. In this context, it becomes pertinent to study the performance of the Indian mutual fund industry. The relation between risk-return determines the performance of a mutual fund scheme. As risk is commensurate with return, therefore, providing maximum return on the investment made within the acceptable associated risk level helps in demarcating the better performers from the laggards.   

Risk-adjusted measures of return are important for both investors and traders. In this paper, we have taken a common risk-adjusted performance measure and applied it to mutual fund schemes to get a better idea of whether the mutual fund is compensating sufficiently for the amount of risk it has.

The principle destinations of this examination work is to investigate money related execution of Equity Linked savings schemes through the factual parameters proposed by William Sharpe, Jack Trey nor and Michael Jensen (Sharpe Ratio, Trey nor Ratio, Jensen Alpha, and so on.). The discoveries of this exploration study will be help full to financial specialists to take their future venture choices.