AN ANALYSIS OF PERFORMANCE OF EQUALITY MUTUAL FUNDS IN INDIA DURING COVID-19

Abstract

Mutual Funds in India A mutual fund is a trust that pools the savings of a group of individuals with similar financial objectives. The funds raised are subsequently invested in capital market instruments such as stocks, bonds, and other assets. The income generated by these assets, as well as the capital gains obtained, are distributed to unit holders in proportion to the number of units they own. As a result, a mutual fund is the best investment for the average person because it allows them to invest in a diversified, professionally managed basket of securities at a reasonable cost. On the basis of return and risk evaluation, this study attempts to analyse the performance of growth-oriented equity diversified schemes. Various financial tests such as the Average Return, Sharpe Ratio, Treynor Ratio, Standard Deviation, Beta, and Coefficient of Determination were used to complete the analysis (R2). The information was gathered from numerous mutual fund plan websites as well as amfiindia.com. According to the results of the analysis, the majority of the funds studied outperformed the Sharpe and Treynor ratios. Introduction COVID-19, with its economic and social implications, has raised the gravity of the difficulties that mutual funds face. Despite positive surprises in the overall market, organic growth in the Indian mutual fund business has slowed. Fees are under pressure, profit margins are shrinking, and investor tastes are shifting, all of which are putting pressure on the long-term outlook. Adding a pandemic to the mix makes it even more difficult for asset managers to stay competitive. Investors have shifted to low-cost passive products, putting more downward pressure on fees and depressing revenue prospects for US mutual fund managers. Many mutual fund companies still use active management, but owing to historic equities market performance, passive management is gaining ground quickly—far quicker than expected. Objective 1. To study the performance of Selected Diversified Equity Mutual Funds in India from 2019 to 2021, as well as the mutual funds industry's pre- and post-covid performance, in order to provide future research opportunities. 2. To compare the performance of a few Indian Diversified Equity Mutual Funds before and after the covid pandemic. vi Scope of the project The research is based on a sample of six mutual fund schemes that are all equity diversified funds. To get a better understanding of the Indian mutual fund industry's present performance trends and the impact of covid on mutual fund performance. Research methodology The following statistical tools and procedures were used to determine if mutual funds underperform or outperform the market index: Standard deviation (Total Risk), Beta (Systematic Risk), and Coefficient of Determination. For the purpose of examining mutual fund returns, the average return was determined. Sharpe and Treynor ratios were calculated for this purpose. Findings On the basis of return and risk evaluation, this study attempts to analyse the performance of growth-oriented equity diversified schemes. Various financial tests such as the Average Return, Sharpe Ratio, Treynor Ratio, Standard Deviation, Beta, and Coefficient of Determination were used to complete the analysis (R2). The information was gathered from numerous mutual fund plan websites as well as amfiindia.com. According to the results of the analysis, the majority of the funds studied outperformed the Sharpe and Treynor ratios. The purpose of this study is to look at the performance of Selected Diversified Equity Mutual Funds in India during the course of the year 2019 to year 2021 and compare the performance of the MF in the pre covid years, i.e., 2017-2019. Selected Diversified Equity Mutual Funds in India were compared for performance. Limitations Because of a lack of appropriate sources for data collecting, the secondary data employed in this project may not be entirely correct. Because the mistake in secondary data cannot be judged, those data will reflect incorrect study results. This is one of the most significant drawbacks of analysing secondary data. These types of studies cannot be completed in a short period of time; a full, in-depth investigation is required to arrive at any relevant and appropriate conclusion. The researcher's ineptness may lead to incorrect interpretation.