METHODS OF DATA COLLECTION
In this project work primary and secondary data sources of
data has been used.
Primary data: Primary data collect through observation ,or
through direct communication or doing experiments .
Secondary data: Secondary data means already available
through books ,journals , magazines ,newspaper.
Mutual funds are as much about marketing as investing in the 1990’s, which is why the hoary cliché”
Mutual funds are sold, not bought” is as true as ever. As Glorianne Stromberg once told Canadian
Business magazine, the fund business may have started out in the portfolio management business,
but “somewhere along the line, the marketers got hold of it, and the advisory function has been
almost superseded by the sales function.”
-Jonathan Chevreau, the Wealthy Boomer
Successful fund marketing creates value for Fund companies, dealers and unit holders so that each
is satisfied. The definition goes much deeper than simply "selling something to somebody". Fund
marketeers must understand
both the "Needs & Wants" side of the equation and the "Product, Ideas, &
Services" side of the equation. Not only must marketing fully understand both sides of the equation,
but it must also effectively communicate the details of each in order to successfully bridge the gap
between the two. Every facet of modern marketing has been effectively employed to dramatically
grow the Indian mutual fund industry
Literature on mutual fund performance evaluation is enormous. A few research studies that have
influenced the preparation of this paper substantially are discussed in this section.
Sharpe, William F. (1966) suggested a measure for the evaluation of portfolio performance. Drawing on
results obtained in the field of portfolio analysis, economist Jack L. Treynor has suggested a new
predictor of mutual fund performance, one that differs from virtually all those used previously by
incorporating the volatility of a fund's return in a simple yet meaningful manner.
Michael C. Jensen (1967) derived a risk-adjusted measure of portfolio performance (Jensen’s alpha) that
estimates how much a manager’s forecasting ability contributes to fund’s returns. As indicated by
Statman (2000), the e SDAR of a fund portfolio is the excess return of the portfolio over the return of the
benchmark index, where the portfolio is leveraged to have the benchmark index’s standard deviation.
S.Narayan Rao , et. al., evaluated performance of Indian mutual funds in a bear market through relative
performance index, risk-return analysis, Treynor’s ratio, Sharpe’s ratio, Sharpe’s measure , Jensen’s
measure, and Fama’s measure. The study used 269 open-ended schemes (out of total schemes of 433)
for computing relative performance index. Then after excluding funds whose returns are less than risk-
free returns, 58 schemes are finally used for further analysis. The results of performance measures
suggest that most of mutual fund schemes in the sample of 58 were able to satisfy investor’s expectations
by giving excess returns over expected returns based on both premium for systematic risk and total risk.
Bijan Roy, et. al., conducted an empirical study on conditional performance of Indian mutual funds. This
paper uses a technique called conditional performance evaluation on a sample of eighty-nine Indian
mutual fund schemes .This paper measures the performance of various mutual funds with both
unconditional and conditional form of CAPM, Treynor- Mazuy model and Henriksson-Merton model. The
effect of incorporating lagged information variables into the evaluation of mutual fund managers’
performance is examined in the Indian context. The results suggest that the use of conditioning lagged
information variables improves the performance of mutual fund schemes, causing alphas to shift towards
right and reducing the number of negative timing coefficients. Mishra, et al., (2002) measured mutual fund
performance using lower partial moment. In this paper, measures of evaluating portfolio performance
based on lower partial moment are developed. Risk from the lower partial moment is measured by taking
into account only those states in which return is below a pre-specified “target rate” like risk-free rate.
Kshama Fernandes(2003) evaluated index fund implementation in India. In this paper, tracking error of
index funds in India is measured .The consistency and level of tracking errors obtained by some well-run
index fund suggests that it is possible to attain low levels of tracking error under Indian conditions. At the
same time, there do seem to be periods where certain index funds appear to depart from the discipline of
indexation. K. Pendaraki et al. studied construction of mutual fund portfolios, developed a multi- criteria
methodology and applied it to the Greek market of equity mutual funds. The methodology is based on the
combination of discrete and continuous multi-criteria decision aid methods for mutual fund selection and
composition. UTADIS multi-criteria decision aid method is employed in order to develop mutual fund’s
performance models. Goal programming model is employed to determine proportion of selected mutual
funds in the final
portfolios. Zakri Y.Bello (2005) matched a sample of socially responsible stock mutual funds matched
to randomly selected conventional funds of similar net assets to investigate differences in characteristics
of assets held, degree of portfolio diversification and variable effects of diversification on investment
performance. The study found that socially responsible funds do not differ significantly from conventional
funds in terms of any of these attributes. Moreover, the effect of diversification on investment performance
is not different between the two groups. Both groups underperformed the
Domini 400 Social Index and S & P 500 during the study period.
SAMPLING TECHNIQUE:
Sampling Design: Convenience sampling
Universe: Employees
Sampling Unit: The sampling unit was limited to the employees of Partap wires
Sample size : 50
