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Abstract
In this paper we tried to evaluate the performance of HDFC open-ended equity schemes with growth option. The period of the study spans from 1st April 2008 till 31st March 2013.To evaluate the performance of the selected mutual fund schemes, monthly returns are compared with Benchmark (BSE National 100 Index) returns. Further, statistical tools like average, standard deviation, beta, coefficient of det erminationand the riskadj usted performance measures suggested by Treynor (1965) and Sharpe (1966) were employed to evaluate the performance for the selected period.
Keywords: open-ended, equity schemes, growth option, risk adjusted performance mea sures
Introduction
Mutual fundsprovideopportunitiesforsmall investors to participate in the capital market without assuming a very high degree of risk. An important principle of investment in capital market is that "do not put all the eggs in one basket i.e. diversification". Asmall investor is not able to have a diversified portfolio mainly due to paucity of resources. However, a mutual fund pools together the savings of such small investors and invests the same in the capital market and passes the benefits to the investors. Thus, investors can indirectly participate in the capital market by subscribing to the units of mutual funds. Mutual funds employ professional fund managers to manage the investment activities. Therefore, investors also get benefits of professional expertise of these managers.
The foundation for the mutual funds operation in India was laid by the parliament in 1963 with the enactment of the Unit Trust of India Act, 1963. According to the Preamble for the Unit Trust of India Act, 1963 the trust was established with the three main objectives:
1. Contributing to India's Industrial Development by transforming household savings into corporate investment.
2. Enabling common Investors to participate in the prosperity of the market through portfolio management aimed at reasonable return, liquidity and safety.
3. Facilitating orderly development of capital market.1
While introducing Unit Trust of India bill in the parliament The Finance Minister Sri T.T. Krishnamchari said, "Unit Trust of India would provide an opportunity for the middle and lower income groups to acquire without much difficulty, property in the form of shares.......This institution is intended to cater mainly to the needs of individual investors whose means are small."
UTI in 1964 started with a...