Performance Evaluation of Mutual Funds: An Analytical Study

Performance Evaluation of Mutual Funds: An Analytical Study

AYUSH KUMAR JAISWAL

(23GSOB2010883)

Under the Guidance of

Dr. Jyotish Kumar Gupta
Associate professor,

School of business,

Galgotias University

GALGOTIAS UNIVERSITY

2024-2025

ABSTRACT

The Indian mutual fund industry has experienced remarkable growth over the past decade, emerging as a vital financial instrument that appeals to both retail and institutional investors. The surge in mutual fund investments is driven by the need for diversified portfolios, professional fund management, and relatively lower transaction costs. However, this growth also raises crucial questions about the performance and efficiency of mutual fund schemes in delivering risk-adjusted returns, which are vital for investors making informed decisions.

This study, titled Performance Evaluation of Mutual Funds: An Analytical Study, systematically evaluates the performance of selected equity mutual funds in India—specifically those categorized under large-cap, mid-cap, and multi-cap schemes. The evaluation covers a five-year period from 2020 to 2025, encompassing different market cycles, economic events, and volatility scenarios. The research employs prominent performance metrics such as the Sharpe Ratio, Treynor Ratio, Jensen’s Alpha, and supplements the analysis with additional tools like the Sortino Ratio and Beta Analysis to assess both systematic and unsystematic risk-adjusted performance.

The methodology is both descriptive and analytical in nature. Data was collected from credible secondary sources including the Association of Mutual Funds in India (AMFI), the Securities and Exchange Board of India (SEBI), and financial databases like Moneycontrol and Value Research Online. Statistical analysis techniques such as descriptive statistics, correlation analysis, and t-tests were used to validate the outcomes. A purposive sampling approach was used to select funds with significant Assets Under Management (AUM), ensuring the inclusion of widely held and actively managed schemes.

The study reveals mixed results: while several funds consistently outperform their benchmarks and demonstrate superior risk-adjusted returns, others fail to deliver, suggesting variations in fund management quality and strategy. The findings highlight the importance of adopting a multifaceted evaluation approach when selecting mutual funds for investment.

Key recommendations emerging from the study include: strengthening investor education on risk-return metrics, enhancing transparency in fund disclosures, mandating regular performance audits, and promoting informed decision-making among retail investors. For policymakers and fund managers, the research underscores the necessity for performance accountability and investor-centric fund design. This thesis ultimately provides actionable insights and strategic guidelines for investors, fund managers, financial advisors, and regulatory authorities alike, contributing to the broader objective of fostering a transparent, efficient, and inclusive mutual fund ecosystem in India.