A Critical Analysis of Selected Mutual Funds in India

TLDR

Mutual funds enable portfolio diversification and risk aversion by pooling household investments into stock and debt markets, while fixed‑income funds invest in debt securities issued by companies, banks, or the government, and the number of income schemes has risen from 91 in 2001 to 330 in 2010, peaking at 506 in 2008. The study aims to evaluate the performance of selected Indian income or debt mutual funds using statistical measures on daily NAV. It analyzes daily NAV data of these schemes to assess performance. Income schemes contribute a large share of the total AUM of the Indian mutual funds industry.

Abstract

Abstract Mutual funds allow for portfolio diversification and relative risk aversion through collection of funds from the households and investment of the same in the stock and debt markets. Fixed- Income Funds in India are a kind of mutual fund which makes investment in debt securities that have been issued either by the companies, banks, or government. Fixed- Income Funds in India are also known as debt funds and income funds. Using various statistical measures the present study aims to evaluating the performance of a few selected income or debt mutual funds schemes of India on the basis of their daily NAV. Popularity of income schemes has only increased in the last decade. Income mutual funds they have seen tremendous growth in their number of schemes from 91 on 31st march 2001 to 330 on 31st march 2010. 506 in 2008 was the maximum ever in terms of total schemes floating in the market. This category has seen a decline only twice in the last decade. First fall was posted in the year 2003 and the second fall was reported in the year 2010. One striking fact which comes to light is the huge percentage contribution of income schemes towards the total AUM of the Indian mutual funds industry.