A COMPARATIVE STUDY OF PERFORMANCE OF DEBT AND EQUITY MUTUAL FUND TAKING SBI MUTUAL FUNDS AS REFERENCE

Abstract

The dissertation aims to compare two types of mutual funds and their performance over a period of 10 years. Both Equity and debt mutual funds are highly favorable financial instruments nowadays. Both types of mutual funds have their own properties. Also to investors it has been a major point of dilemma that in which instrument it will be better to invest to reduce the risk and maximize gains. Debt mutual funds and equity mutual funds have very different characteristics and mostly investors invest in a certain combination of these two, but in the end investor invest money to gain on investment. In this dissertation it has been tried to compare these two types of financial instruments on various parameters. Both the mutual funds has been chosen is of SBI, to give the comparison a more equal level platform. Also one of the major reason of choosing SBI is that both the funds under the research is at least more than a decade old and we can have 10 years annual data. Both the funds are compared mainly on 5 parameters namely Standard deviation, Beta, Alpha, R-Square Tobin‟s Q Ratio and Sharpe ratio. All the parameters provide a different aspect of both the funds and how it has been performing on that particular aspect. The final result in summary is that while equity mutual funds performed better in return performance parameters while equity mutual fund has performed better in risk aversion parameters which are on expected grounds.