A STUDY ON PERFORMANCE EVALUATION OF LARGE CAP …

A STUDY ON PERFORMANCE EVALUATION OF

LARGE CAP EQUITY MUTUAL FUNDS

Ms. Jayalakshmi S Saunshi

MBA Global Business School, Hubli

Dr. Bhargav Revankar

Associate Professor, Global Business School

Address: Opp. Hubballi Residence, Beside Bellad

Hyundai Showroom, Bhairidevarkoppa, Hubballi-580025, Karnataka

Email Id: [email protected]

ABSTRACT

Mutual Fund is a type of investment vehicle for small investors to enter into Bluechip Companies.

Mutual Fund is one of the most important mechanisms for indirect investment in financial

markets, which provides better conditions in terms of risk and return. And who want to take

invest in less risky equity funds i.e. Large Cap Funds, But don’t know which mutual Fund is

performing well in the market for them this project will be helpful.

The present study evaluates and compares the performance of Large Cap Equity Funds of

Top Asset Management Companies (as on March 2019) for the period of 5 years from August

2014 to July 2019. The Performance of selected funds is analysed with the help of Average

Return, Compounded Annual Growth Rate (CAGR), Standard Deviation, Beta and Sharpe Ratio.

Key Words: Mutual Fund, Large Cap Equity Funds, Asset Management Companies,

Compounded Annual Growth Rate, Sharpe Index

Objective:

To measure the risk and return associated with selected mutual fund.

To evaluate the performance of Large Cap Equity Funds of Selected Asset Management

Companies.

To compare the performance of Large Cap Equity Funds of Selected Asset Management

Companies.

Journal of Information and Computational Science

Volume 9 Issue 12 - 2019

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mailto:[email protected]

Methodology:

The Methodology adopted was Non-Probability method, Judgmental Sampling as only Large

Cap Equity Mutual Fund schemes are selected for evaluation and comparison with NIFTY

50.And this project is Descriptive in nature. The sample size was 10 Large Cap Funds From Top

10 Asset Management Companies and a NIFTY 50 index. The study was done by comparing the

past 5 year’s returns of index and mutual Fund Schemes.

The Evaluation and Comparison was done by analysing the statistical tools Average Return,

Standard Deviation, Compound annual Growth Rate, Sharpe Ratio, Alpha and Beta to measure

the Risk and Return associated with the selected mutual funds using Microsoft Office Excel

2010.

Findings: After Comparing and analysing all factors, it is found that all Large Cap Fund

Schemes have performed well than Nifty 50 return except DSP Top 100 Equity Fund and

Reliance Large Cap Fund has given highest average return i.e., 11.94% as compared to other

Large Cap Funds. The Sharpe ratio of Axis Bluechip Fund is high i.e., 0.614 as compared to

other funds and is also ranked 1 among performance of the scheme. Whereas DSP Top Equity

Fund has lowest Sharpe Ratio i.e., 0.176.

From the study it is suggested that the DSP Top Equity Fund is down falling,

investing in the same is not recommended to the investors. The reports conclude that the Mutual

Fund Investments are better option for the investors who are seeking for Capital Gain of their

savings with less Risk associated.

INDUSTRY PROFILE:

A mutual fund is a professionally-managed trust that pools the savings of many investors and

invests them in securities like stocks, bonds, short-term money market instruments and

commodities such as precious metals. Investors in a mutual fund have a common financial goal

and their money is invested in different asset classes in accordance with the fund’s investment

objective. A mutual fund is set up in the form of a trust that has a Sponsor, Trustees, Asset

Management Company (AMC). The trust is established by a sponsor(s) who is like a promoter of

a company and the said Trust is registered with Securities and Exchange Board of India (SEBI)

as a Mutual Fund.

The Cyclical Process of Mutual Fund Operation in India

Figure 1



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History of Indian Mutual Funds:

The mutual fund industry in India started in 1963 with the formation of Unit Trust of India, at the

initiative of the Government of India and Reserve Bank of India. The history of mutual funds in

India can be broadly divided into four distinct phases.

First Phase - 1964-1987

Unit Trust of India (UTI) was established in 1963 by an Act of Parliament. It was set up by the

Reserve Bank of India and functioned under the Regulatory and administrative control of the

Reserve Bank of India. In 1978 UTI was de-linked from the RBI and the Industrial Development

Bank of India (IDBI) took over the regulatory and administrative control in place of RBI. The

first scheme launched by UTI was Unit Scheme 1964. At the end of 1988 UTI had Rs. 6,700

crores of assets under management.

Second Phase - 1987-1993 (Entry of Public Sector Funds)

1987 marked the entry of non-UTI, public sector mutual funds set up by public sector banks and

Life Insurance Corporation of India (LIC) and General Insurance Corporation of India (GIC).

SBI Mutual Fund was the first non-UTI Mutual Fund established in June 1987 followed by

Canbank Mutual Fund (Dec 87), Punjab National Bank Mutual Fund (Aug 89), Indian Bank

Mutual Fund (Nov 89), Bank of India (Jun 90), Bank of Baroda Mutual Fund (Oct 92). LIC

established its mutual fund in June 1989 while GIC had set up its mutual fund in December

1990.At the end of 1993, the mutual fund industry had assets under management of Rs. 47,004

crores.

Third Phase - 1993-2003 (Entry of Private Sector Funds)

With the entry of private sector funds in 1993, a new era started in the Indian mutual fund

industry, giving the Indian investors a wider choice of fund families. Also, 1993 was the year in

which the first Mutual Fund Regulations came into being, under which all mutual funds, except

UTI were to be registered and governed. The erstwhile Kothari Pioneer (now merged with

Franklin Templeton) was the first private sector mutual fund registered in July 1993.

The 1993 SEBI (Mutual Fund) Regulations were substituted by a more comprehensive and

revised Mutual Fund Regulations in 1996. The industry now functions under the SEBI (Mutual

Fund) Regulations 1996.

The number of mutual fund houses went on increasing, with many foreign mutual funds setting

up funds in India and also the industry has witnessed several mergers and acquisitions. As at the

end of January 2003, there were 33 mutual funds with total assets of Rs. 1,21,805 crores. The

Unit Trust of India with Rs. 44,541 crores of assets under management was way ahead of other

mutual funds.

Fourth Phase - since February 2003

In February 2003, following the repeal of the Unit Trust of India Act 1963 UTI was bifurcated

into two separate entities. One is the Specified Undertaking of the Unit Trust of India with assets

under management of Rs. 29,835 crores as at the end of January 2003, representing broadly, the

assets of US 64 scheme, assured return and certain other schemes. The Specified Undertaking of



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Unit Trust of India, functioning under an administrator and under the rules framed by

Government of India and does not come under the purview of the Mutual Fund Regulations.

The second is the UTI Mutual Fund, sponsored by SBI, PNB, BOB and LIC. It is registered with

SEBI and functions under the Mutual Fund Regulations. With the bifurcation of the erstwhile

UTI which had in March 2000 more than Rs. 76,000 crores of assets under management and with

the setting up of a UTI Mutual Fund, conforming to the SEBI Mutual Fund Regulations, and with

recent mergers taking place among different private sector funds, the mutual fund industry has

entered its current phase of consolidation and growth.

The graph indicates the growth of assets over the years.

Figure 2

Structure of Mutual Fund

The structure of Mutual Funds in India is a three-tier one.

Figure 3

1. The Fund Sponsor

The Fund Sponsor is the first layer in the three-tier structure of Mutual Funds in India. SEBI

regulations say that a fund sponsor is any person or any entity that can set up a Mutual Fund to

earn money by fund management. A sponsor can be seen as the promoter if the associate



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company. A sponsor has to approach SEBI to seek permission for a setting up a Mutual Fund.

Once SEBI agrees to the inception, a Public Trust is formed under the Indian Trust Act, 1882 and

is registered with SEBI.

2. Trust and Trustees

A trust is created by the fund sponsor in favour of the trustees, through a document called a trust

deed. The trust is managed by the trustees and they are answerable to investors. They can be seen

as primary guardians of fund and assets. They also monitor the systems, procedures and overall

working of the asset management company. Without the trustee’s approval, AMC cannot float

any scheme in the market. The Trustees have to report to SEBI every six months about the

activities of the AMC.

3. Asset Management Companies

The AMC acts as the fund manager or as an investment manager for the trust. A small fee is paid

to the AMC for managing the fund. The AMC is responsible for all the fund-related activities. It

initiates various schemes and launches the same. The AMC is bound to manage funds and

provide services to the investor.

Other Components in the Structure of Mutual Funds

Custodian

A Custodian is responsible for the safekeeping of the securities of the Mutual Fund. They

manage the investment account of the Mutual Fund; ensure the delivery and transfer of the

securities. They also collect and track the dividends & interests received on the Mutual Fund

investment.

Registrar and Transfer Agents(RTAS)

These are the entities that provide services to Mutual Funds. RTAS are more like the operational

arm of Mutual Funds. Since the operations of all Mutual Fund companies are similar, it is

economical in scale and cost effective for all the 44 AMCs to seek the services of RTAs. CAMS,

Karvy, Sundaram, Principal, Templeton etc are some of the well-known RTAs in India.

Regulatory Authority

1. Security Exchange Board of India (SEBI):

The establishment of SEBI in 1988 was an achievement for the Indian stock markets as

it removed low levels of transparency, unreliable clearing, and settlement systems. Through the

SEBI Act of 1992, the organization was given statutory powers. Today, SEBI is the market

watchdog and regulates everything that goes on in the stock markets. The basic functions of the

Securities and Exchange Board of India as "to protect the interests of investors in securities and

to promote the development of, and to regulate the securities market and for matters connected

therewith or incidental thereto".

Presently the chairman of SEBI is Shri Ajay Tyagi. He is a 1984 batch IAS officer of

Himachal Pradesh cadre. The headquarter of SEBI is in Mumbai.



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2. Association of Mutual Fund in India (AMFI):

The Association of Mutual Funds in India (AMFI) is dedicated to developing the Indian Mutual

Fund Industry on professional, healthy and ethical lines and to enhance and maintain standards in

all areas with a view to protecting and promoting the interests of mutual funds and their unit

holders. AMFI is a registered association under SEBI on August 22, 1995. Association of Mutual

Fund in India (AMFI) was formed in order to assist trustee in their role with a chairmanship of

Shri.P.K.Kaul, former Cabinet Secretary and Ambassador to the United States. All the 43 Asset

Management Companies that are registered with SEBI are its members AMFI has become a

strong body in mutual fund industry and embarks on a campaign to sharpen the industry's focus

on the consumer.

Types of Mutual Fund

Figure 4

By Structure

Open-Ended Funds: These are funds in which units are open for purchase or redemption

through the year. All purchases/redemption of these fund units are done at prevailing NAVs.

Basically these funds will allow investors to keep invest as long as they want. There are no limits

on how much can be invested in the fund.

Close-Ended Funds: These are funds in which units can be purchased only during the initial

offer period. Units can be redeemed at a specified maturity date. To provide for liquidity, these

schemes are often listed for trade on a stock exchange.

Interval Funds: These are funds that have the features of open-ended and close-ended funds in

that they are opened for repurchase of shares at different intervals during the fund tenure.

By Nature

Equity Funds: These are funds that invest in equity stocks/shares of companies. These are

considered high-risk funds but also tend to provide high returns.



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Debt Funds: These are funds that invest in debt instruments e.g. company debentures,

government bonds and other fixed income assets. They are considered safe investments and

provide fixed returns.

Balanced or Hybrid Funds: These are funds that invest in a mix of asset classes. In some cases,

the proportion of equity is higher than debt while in others it is the other way round. Risk and

returns are balanced out this way

By Investment objective

Growth funds: Under these schemes, money is invested primarily in equity stocks with the

purpose of providing capital appreciation. They are considered to be risky funds ideal for

investors with a long-term investment timeline. Since they are risky funds they are also ideal for

those who are looking for higher returns on their investments.

Income funds: Under these schemes, money is invested primarily in fixed-income instruments

e.g. bonds, debentures etc. with the purpose of providing capital protection and regular income to

investors.

Money Market Funds: These are funds that invest in liquid instruments e.g. T-Bills, CPs etc.

They are considered safe investments for those looking to park surplus funds for immediate but

moderate returns.

Liquid funds: Under these schemes, money is invested primarily in short-term or very short-

term instruments e.g. T-Bills, CPs etc. with the purpose of providing liquidity.

Other Schemes

Tax-Saving Funds (ELSS): These are funds that invest primarily in equity shares. Investments

made in these funds qualify for deductions under the Income Tax Act. They are considered high

on risk but also offer high returns if the fund performs well.

Index Funds: These are funds that invest in instruments that represent a particular index on an

exchange so as to mirror the movement and returns of the index e.g. buying shares representative

of the BSE Sensex.

Sector Funds: These are funds that invest in a particular sector of the market e.g. Infrastructure

funds invest only in those instruments or companies that relate to the infrastructure sector.

Returns are tied to the performance of the chosen sector.

Equity Funds Focused on Market Capitalization

Large Cap Equity Funds: These funds are those which invest in equity shares of companies

which have large market capitalization.



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Mid Cap Equity Funds: These funds are those which invest in equity shares of companies

which have medium market capitalization.

Small Cap Equity Funds: These funds are those which invest in equity shares of companies

which have smaller market capitalization.

Multi Cap Equity Funds: These funds are diversified equity funds which invest in all those

companies which have large, Middle and smaller market capitalization.

INTRODUCTION OF PROJECT:

“A STUDY ON PERFORMANCE EVALUATION OF LARGE CAP EQUITY MUTUAL

FUNDS.”

Large Cap Equity Funds are funds which invest a large portion of their corpus in companies with

large market capitalization. These funds generally offer stable and sustainable returns over a

period of time. These classified as “less volatile, less risk, less return” type.

The Project investigates the performance of Top 10 Asset Management Company’s Large Cap

Funds for the period of 5 years from August 2019 to July 2019. Daily NAV of different schemes

have been used to calculate the returns from the fund schemes. Nifty 50 is considered as

Benchmark for comparison.

Purpose of the study:

The Study primarily deals with only Equity based Large Cap mutual fund investments. The study

considers the Performance of Large Cap funds of 10 Asset Management Companies. The

analysis is strictly based on share price and Net asset values of the mutual funds which will help

an investor to identify better investment Funds.

LITERATURE REVIEW

1. A STUDY ON PERFORMANCE OF LARGE CAP EQUITY MUTUAL FUNDS IN

INDIA. (Prakash Yalavatti, Bheemanagouda 2017) The present study evaluates and compares

the performance of large cap equity funds of four asset management companies (L&T, DHFL

Pramerica, HDFC and Principal Mutual Fund). The results of the study show that L&T India

Large Cap Equity Fund outperforms the benchmark index, i.e., NSE Nifty 50, in terms of all

measurement ratios. The performance of Principal Large Cap Fund and HDFC Top 200 is

moderate and they also outperform the benchmark index. However, DHFL Pramerica Large Cap

Equity Fund’s performance is very poor as compared to other selected funds.

2. PERFORMANCE EVALUATION OF EQUITY ORIENTED LARGE CAP MUTUAL

FUNDS IN INDIA (A STUDY WITH REFERENCE TO SELECT ASSET

MANAGEMENT COMPANIES). (Sheshrao.M Shivaji& Dr.Waghamare 2014) The present

study has examined five Asset Management Companies (AMC’s) are found operating equity

oriented large cap schemes. Hence, researcher has purposively chosen one scheme from each

AMC’s over a period of 06 years from 2007-08 to 2012-12. Accordingly, funds have been



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ranked by taking into account their performance measures using standard deviation, beta, co-

efficient of determination (R²), Treynor’s, Sharpe, Jensen, Fama and M² measures. Thus, a fund

that scored the highest of the average of the said parameters has been ranked as the best and same

method has been adopted in ranking the rest of the funds.

3. PERFORMANCE EVALUATION OF EQUITY MUTUAL FUNDS (ON SELECTED

EQUITY LARGE CAP FUNDS). (Dr.R.Narayanasamy & V. Rathnamani 2013) This study

mainly focused on the performance of selected equity large cap mutual fund schemes in terms of

risk- return relationship. The main objectives of this research work is to analysis financial

performance of selected mutual fund schemes through the statistical parameters such as (alpha,

beta, standard deviation, r-squared, Sharpe ratio). The researcher finds the fall in the CNX

NIFTY during the year 2011 has impacted the performance of all the selected funds. In the

ultimate analysis it may be concluded that all the funds have performed well in the high volatile

market movement expect Reliance vision.

4. A study on Performance of Equity Mutual funds (with special reference to equity large cap

and mid cap mutual funds). (R.Nandhini & Dr. V. Rathnamani 2013) The present study

focused on the performance of select equity large and small cap mutual funds and it was analysed

with risk return measurement tools such as alpha, beta, standard deviation and Sharpe ratio. The

main tools used for the study are Standard Deviation (SD), BETA, ALPHA, R-SQUARED, and

Sharpe Ratio. The findings of the study revealed that among selected 5 large cap funds SBI

BLUE CHIP fund has been ranked first based on various parameters such as fund return, alpha,

beta, standard deviation and Sharpe ratio.

5. AN EMPIRICAL STUDY ON THE PERFORMANCE OF SELECT LARGE CAP

EQUITY MUTUAL FUNDS IN INDIA. (Samyabrata Das 2013) Titled as An Empirical Study

on the Performance of select large cap equity mutual funds in India. The main objective of the

study is to analyse the performance of select actively managed large cap equity funds in the line

of risk-return parameters. This study is based on fourteen funds from twelve Asset Management

Companies. All the funds are ranked under seven performance measures, namely, fund return,

fund standard deviation, Sharpe Ratio, Treynor Ratio, return from systematic investment plan

(SIP), Jensen Alpha, and RSQ, for five different time periods of 1-year, 3-year, 5-year, 7-year,

and 10-year.

6. COMPARATIVE STUDY OF SELECTED LARGE CAP EQUITY MUTUAL FUNDS.

(Sunil M. Adhav & Mr. Anoop Waghmare 2013) The present research is an attempt to study

comparative performance of selected mutual funds. The study focus on selected mutual fund

schemes of selected Indian companies comprising Equity Schemes. The total 29 equity mutual

funds are selected for the study. The performance of selected mutual funds is analysed with the

help of Return, risk (standard Deviation), and Sharpe ratio.

7. PERFORMANCE EVALUATION OF SCHEMES OF INDIAN AND INTERNATIONAL

MUTUAL FUNDS: AN EMPIRICAL STUDY OF SELECTED EQUITY LARGE CAP

FUNDS. (Dr.Pushpa Bhatt & Asim Kumar Bandopa dhyay 2011)



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The researcher made comparison of performance evaluation of selected schemes of Indian and

international funds. The researcher compares the ranking of mutual funds based on expense ratio,

Sharpe’s ratio and Jenson’s Alpha. T-test and Spearman’s rank correlation tests. It uses three

measures, viz., expense ratio, Sharpe ratio and Jenson s Alpha. Next, an attempt is made to

statistically compare the ranking of mutual funds based on expense ratio, Sharpe ratio and

Jensons Alpha.

8. A STUDY ON PERFORMANCE OF LARGE CAP EQUITY FUNDS OF INDIAN

MUTUAL FUNDS.

Kabirdoss devi, Dr.S.Paneerselvam & Dr.P.Raja 2013) This paper is an attempt to study the

performance evaluation of selected open ended large cap equity funds in terms of risk, return and

fund size relationship. This research examined the performance of large cap equity funds of

mutual funds. There are several aspects and dimensions in evaluating the performance of mutual

funds, but this study focused on five aspects: namely Sharpe measure; Jensen differential

measure; Treynor measure; Sortino measure and Information measure. Correlation coefficients

between all the parameters were computed to assess the degree of relationship between fund size

and performance of mutual funds.

Objectives and Methodology

Objectives:

Following are the objectives set for the study

To Measure the risk and return associated with selected Mutual Funds.

To Evaluate the Performance of Large Cap Equity Mutual Funds of Selected Asset

Management Companies (AMC’s).

To Compare the Performance of Large Cap Equity Mutual Funds of Selected Asset

Management Companies (AMC’s).

RESEARCH METHODOLOGY

Study Area: Study area is considered as Financial Markets of India, as the study deals

with NSE Market and Top 10 Asset Management Companies, in which one Large Cap Fund

from each AMC have been selected for comparison.

Data Collection Method:

Secondary Data:

The secondary data is collected from secondary sources for the purpose of evaluation and

comparison. The data is collected from different sources like selected AMC’s websites, AMFI

website, NSE & Journals.



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Research Type: Descriptive

Descriptive research is research used to “describe” a situation, subject, behaviour, or

phenomenon. Description research is used to observe and describe a research subject or problem

without influencing or manipulating the variables in any way, Descriptive research is more

statistical in nature.

Sampling Method: Non- Probability Method – Judgmental sampling

Non-probability sampling is a sampling technique where the samples are gathered in a process

that does not give all the individuals in the population equal chances of being selected. This is

followed as all funds can’t be considered for comparison

Judgmental Sampling:

The Judgmental Sampling is the non-random sampling technique wherein the choice of sample

items depends exclusively on the investigator's knowledge and professional judgment. This

sampling is used as there should be some judgment as selecting only Equity funds for

comparison

Sample size:

10 Large Cap funds from Top 10 Asset Management Companies are considered for performance

evaluation and comparison between funds.

Table No.1: Top 10 AMC’s and Large Cap Growth Funds

Ran

k

AMC’s Large-Cap Funds

1 ICICI Prudential Asset management Company ICICI Prudential Bluechip Fund

2 HDFC Asset management Company HDFC Top 100 Fund

3 Reliance Nippon Life Asset Management

Limited Reliance Large Cap Fund

4 Aditya Birla Sun Life Asset Management

Company Limited ABSL Frontline Equity Fund

5 SBI Funds Management Private Limited SBI Bluechip Fund

6 UTI Asset Management Company Limited UTI Mastershare Unit Scheme

7 Kotak Mahindra Asset Management Company

Limited Kotak Bluechip Fund

8 Franklin Templeton Mutual Fund Franklin India Bluechip Fund

9 DSP Blackrock Mutual Fund DSP Top 100 Equity Fund

10 Axis Mutual Fund Axis Bluechip Fund



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Risk Free Return: Risk free return for calculation is considered MIBOR rates.

MIBOR rates: The Mumbai Inter-Bank Offered Rate (MIBOR) is the interest rate benchmark at

which banks borrow unsecured funds from one another in the Indian interbank market. It is

currently used as a reference rate for corporate debentures, term deposits, forward rate

agreements, interest rate swaps, and floating rate notes. The rate is only offered to first class

borrowers and lending institutions and it is calculated daily by the National Stock Exchange of

India, Fixed Income Money Market, and Derivative Association of India.

Types of Statistical tools used for Comparison

Compounded Annual Growth rate [CAGR]:

CAGR can be used to calculate the average growth of a single investment. Due to market

volatility, the year-to-year growth of an investment may be difficult to interpret. For example, an

investment may increase in value by 8% in one year, decrease in value by 2% the following year

and increase in value by 5% in the next. With inconsistent annual growth, CAGR may be used to

give a broader picture of an investment’s progress.

CAGR = (Final Value

Starting Value)

1

N

− 1

Standard Deviation:

Standard deviation is the measure of dispersion of a set of data from its mean. It measures the

absolute variability of a distribution, the higher the dispersion or variability, the greater is the

standard deviation and greater will be the magnitude of the deviation of the value from their

mean. It measures how Spread out the numbers.

σ = √Σ(Χ − X)2

n − 1

Alpha:

Alpha is considered the active return on an investment, gauges the performance of an

investment against a market index or benchmark which is considered to represent the market's

movement as a whole. The excess return of an investment relative to the return of a benchmark

index is the investment's alpha.

α= (Rp-Rf)-(β*Rm-Rf)

Rp = Portfolio return

Rf = Risk Free Return

Β = Beta

Rm = Market Return



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Beta:

Beta (β or beta coefficient) of an investment indicates whether the investment is more or less

volatile than the market as a whole. A beta of less than 1 indicates that the security is theoretically

less volatile than the market. A beta of greater than 1 indicates that the security's price is

theoretically more volatile than the market.

Beta =n∑𝑋𝑌 − (𝛴𝑋) ∗ (𝛴𝑌)

𝑛 ∑ 𝑋2 − (∑ 𝑋)2

Sharpe Ratio:

The ratio describes how much excess return you are receiving for the extra volatility that you

endure for holding a riskier asset. It is a measure of risk adjusted return comparing an

investment's excess return over the risk free rate to its standard deviation of returns. The higher

the ratio, the greater the investment return relative to the amount of risk taken, and thus, the better

the investment.

Sharp Ratio= (Mean portfolio return-Risk free rate)/Annualized Standard Deviation of portfolio

return

DATA ANALYSIS

1. ICICI Prudential Bluechip Fund-Regular-Growth Option

Table No.2

Particulars Nifty 50

ICICI

Bluechip

Fund

2014-15 12.24% 19.44%

2015-16 1.12% 4.72%

2016-17 16.68% 19.29%

2017-18 12.28% 9.68%

2018-19 -2.01% -1.69%

Total 40.30% 51.45%

Average Return 8.06% 10.29%

Outer Performance 2.23%

Compounded Annual Growth

Rate(CAGR) 5 Years 7.89% 10.03%

Standard Deviation 8.05% 9.21%

MIBOR rate 5.75%

Beta 1.051

Alpha 2.110

Sharpe Ratio 0.493

Source: Calculated based on NAV Data of Respective Schemes and Benchmark Index



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Interpretation: The Average return of Benchmark Nifty 50 is 8.06%, which is less than Average

return of ICICI Prudential Bluechip Fund i.e. 10.29%. It indicates that the Fund has outer

performed Nifty 50 by 2.23%. Fund has 10.03% and Nifty 50 has 7.89% CAGR for 5 years.

Fund’s Standard Deviation is 9.21% which is more compared to Nifty 50 i.e. 8.05%, as there is

no consistency and more dispersion of return. According to Sharpe Ratio, every one unit of risk

an investor takes on Fund, he gets 0.493 of return. According Alpha, fund has outer performed by

2.110 with Market Index. Beta indicates the fund is more volatile than the market as Beta is

1.051.

2. HDFC Top 100 Fund-Regular- Regular-Growth Option

Table No.3

Particulars Nifty 50 HDFC Top 100

Fund

2014-15 12.24% 14.14%

2015-16 1.12% 1.80%

2016-17 16.68% 24.02%

2017-18 12.28% 4.68%

2018-19 -2.01% 3.30%

Total 40.30% 47.94%



CAGR 5 Years 7.89% 9.39%


MIBOR rate 5.75%

Beta 0.926

Alpha 1.699

Sharpe Ratio 0.409


Interpretation:

The Average return of Benchmark Nifty 50 is 8.06%, which is less than Average return of

HDFC Top 100 Fund i.e. 9.59%. It indicates that the Fund has outer performed Nifty 500 by

1.53%. Fund has 9.39% and Nifty 50 has 7.89% CAGR for 5 years. Fund’s Standard

Deviation is 9.39% which is more compared to Nifty 50 i.e. 8.05%, as there is no consistency and

more dispersion of return. According to Sharpe Ratio, every one unit of risk an investor takes on

Fund, he gets 0.409 of return. According Alpha, fund has outer performed by 1.699 with Market

Index. Beta indicates the fund is more volatile than the market as Beta is 0.926.



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3. Reliance Large Cap Fund-Regular-Growth Option

Table No.4

Particulars Nifty 50 Reliance Large Cap

Fund

2014-15 12.24% 27.64%

2015-16 1.12% -0.21%

2016-17 16.68% 24.61%

2017-18 12.28% 8.02%

2018-19 -2.01% -0.36%

Total 40.30% 59.71%



CAGR 5 Years 7.89% 11.26%


MIBOR rate 5.75%

Beta 1.414

Alpha 2.926

Sharpe Ratio 0.461



return of Reliance Large Cap fund i.e. 11.94%. It indicates that the Fund has outer performed

Nifty 50 by 3.88%. Fund has 11.26% and Nifty 50 has 7.89% CAGR for 5 years. Fund’s

Standard Deviation is 13.43% which is more compared to Nifty 50 i.e. 8.05%, as there is no

consistency and more dispersion of return. According to Sharpe Ratio, every one unit of risk an

investor takes on Fund, he gets 0.461 of return. According Alpha, fund has outer performed by


2.926.

4. Aditya Birla Sun Life Frontline Equity Fund-Regular-Growth Option

Table No.5

Particulars Nifty 50 ABSL Frontline

Equity Fund

2014-15 12.24% 22.95%

2015-16 1.12% 5.80%

2016-17 16.68% 18.45%

2017-18 12.28% 5.80%

2018-19 -2.01% -3.72%

Total 40.30% 49.27%



CAGR 5 Years 7.89% 9.52%



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MIBOR rate 5.75%

Beta 1.067

Alpha 1.641

Sharpe Ratio 0.382



return of ABSL Frontline Equity Fund i.e. 9.85%. It indicates that the Fund has outer performed






1.067

5. SBI Bluechip Fund-Regular-Regular-Growth Option

Table No.6

Particulars Nifty 50 SBI Bluechip Fund

2014-15 12.24% 29.04%

2015-16 1.12% 8.20%

2016-17 16.68% 14.73%

2017-18 12.28% 6.52%

2018-19 -2.01% -2.42%

Total 40.30% 56.06%



CAGR 5 Years 7.89% 10.96%


MIBOR rate 5.75%

Beta 0.939

Alpha 3.294

Sharpe Ratio 0.467


Interpretation:

The Average return of Benchmark Nifty 50 is 8.06%, which is less than Average return of SBI

Bluechip Fund i.e. 11.21%. It indicates that the Fund has outer performed Nifty 50 by 3.15%.

Fund has 10.96% and Nifty 50 has 7.89% CAGR for 5 years. Fund’s Standard Deviation is

11.70% which is more compared to Nifty 50 i.e. 8.05%, as there is no consistency and more

dispersion of return. According to Sharpe Ratio, every one unit of risk an investor takes on Fund,

he gets 0.467 of return. According Alpha, fund has outer performed by 3.294 with Market Index.

Beta indicates the fund is more volatile than the market as Beta is 0.939.



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6. UTI Mastershare Unit Scheme-Regular-Growth Option

Table No.7

Particulars Nifty 50 UTI Mastershare Unit

Scheme

2014-15 12.24% 23.11%

2015-16 1.12% 0.65%

2016-17 16.68% 15.55%

2017-18 12.28% 11.21%

2018-19 -2.01% -3.88%

Total 40.30% 46.64%



CAGR 5 Years 7.89% 9.06%


MIBOR rate 5.75%

Beta 1.205

Alpha 0.794

Sharpe Ratio 0.326



return of UTI Mastershare Unit Scheme Fund i.e. 9.33%. It indicates that the Fund has outer

performed Nifty 50 by 1.27%. Fund has 9.06% and Nifty 50 has 7.89% CAGR for 5 years.

Fund’s Standard Deviation is 10.98% which is more compared to Nifty 50 i.e. 8.05%, as there is

no consistency and more dispersion of return. According to Sharpe Ratio, every one unit of risk

an investor takes on Fund, he gets 0.326 of return. According Alpha, fund has outer performed by


1.205.

7. Kotak Bluechip Fund-Regular-Regular-Growth Option

Table No. 8

Particulars Nifty 50 Kotak Bluechip

Fund

2014-15 12.24% 27.38%

2015-16 1.12% 3.26%

2016-17 16.68% 15.36%

2017-18 12.28% 8.99%

2018-19 -2.01% -4.28%

Total 40.30% 50.72%



CAGR 5 Years 7.89% 9.74%




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MIBOR Risk free rate 5.75%

Beta 1.177

Alpha 1.674

Sharpe Ratio 0.365



return of Kotak Bluechip Fund i.e. 10.14%. It indicates that the Fund has outer performed Nifty

50 by 2.08%. Fund has 9.74% and Nifty 50 has 7.89% CAGR for 5 years. Fund’s Standard

Deviation is 12.05% which is more compared to Nifty 50 i.e. 8.05%, as there is no consistency

and more dispersion of return. According to Sharpe Ratio, every one unit of risk an investor takes

on Fund, he gets 0.365 of return. According Alpha, fund has outer performed by 1.674 with

Market Index. Beta indicates the fund is more volatile than the market as Beta is 1.177.

8. Franklin India Bluechip Fund-Regular-Growth Option

Table No. 9

Particulars Nifty 50 Franklin India

Bluechip Fund

2014-15 12.24% 23.46%

2015-16 1.12% 4.80%

2016-17 16.68% 15.60%

2017-18 12.28% 3.87%

2018-19 -2.01% -5.79%

Total 40.30% 41.94%



CAGR 5 Years 7.89% 7.96%


MIBOR Risk free rate 5.75%

Beta 1.056

Alpha 0.198

Sharpe Ratio 0.233



return of Franklin India Bluechip Fund i.e. 8.39%. It indicates that the Fund has outer performed






1.056.



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9. DSP Top 100 Equity Fund-Regular-Growth Option

Table No. 10

Particulars Nifty 50 DSP Top 100

Equity Fund

2014-15 12.24% 18.02%

2015-16 1.12% 3.78%

2016-17 16.68% 15.64%

2017-18 12.28% 6.30%

2018-19 -2.01% -6.36%

Total 40.30% 37.39%


Under Performance -0.58%

CAGR 5 Years 7.89% 7.29%


MIBOR rate 5.75%

Beta 1.051

Alpha -0.718

Sharpe Ratio 0.176


Interpretation: The Average return of Benchmark Nifty 50 is 8.06%, which is more than

Average return of DSP Top 100 Equity Fund i.e. 7.48%. It indicates that the Fund has

underperformed Nifty 50 by 0.58%. Fund has 7.29% and Nifty 50 has 7.89% CAGR for 5

years. Fund’s Standard Deviation is 9.80% which is more compared to Nifty 50 i.e. 8.05%, as

there is no consistency and more dispersion of return. According to Sharpe Ratio, every one unit

of risk an investor takes on Fund, he gets 0.176 of return. According Alpha, fund has

underperformed by -0.58 with Market Index. Beta indicates the fund is more volatile than the

market as Beta is 1.051.

10. Axis Bluechip Fund-Regular-Growth Option

Table No. 11

Particulars Nifty 50 Axis Bluechip

Fund

2014-15 12.24% 19.04%

2015-16 1.12% 1.45%

2016-17 16.68% 16.96%

2017-18 12.28% 20.96%

2018-19 -2.01% 0.73%

Total 40.30% 59.16%



CAGR 5 Years 7.89% 11.52%




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MIBOR rate 5.75%

Beta 1.145

Alpha 3.436

Sharpe Ratio 0.614


Interpretation:

The Average return of Benchmark Nifty 50 is 8.06%, which is less than Average return of Axis

Bluechip Fund i.e. 11.83%. It indicates that the Fund has outer performed Nifty 50 by 1.80%.

Fund has 11.52% and Nifty 50 has 7.89% CAGR for 5 years. Fund’s Standard Deviation is

9.91% which is more compared to Nifty 50 i.e. 8.05%, as there is no consistency and more

dispersion of return. According to Sharpe Ratio, every one unit of risk an investor takes on Fund,

he gets 0.614 of return. According Alpha, fund has outer performed by 3.436 with Market Index.

Beta indicates the fund is more volatile than the market as Beta is 1.145.

Table No. 12: Showing CAGR values of the Scheme

Schemes CAGR Rank

Axis Bluechip Fund 11.52% 1

Reliance Large Cap Fund 11.26% 2

SBI Bluechip Fund 10.96% 3

ICICI Prudential Bluechip Fund 10.03% 4

Kotak Bluechip Fund 9.74% 5

ABSL Frontline Equity 9.52% 6

HDFC Top 100 Fund 9.39% 7

UTI Mastershare Unit Scheme 9.06% 8

Franklin India Bluechip fund 7.96% 9

DSP Top 100 Equity Fund 7.29% 10


Figure 5

0

5

10

15

CAGR (5 year)

CAGR (5 year)



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Interpretation:

Axis Bluechip Fund gives highest rate of return on investor investment i.e. 11.52% for 5 years.

Followed by Reliance Large Cap Fund with 11.26% for 5 years. DSP Top 100 Equity Fund gives

lowest return i.e. 7.29% compared to other large cap funds.

Table No. 13: Showing Beta values of the Scheme

Schemes Beta

HDFC Top 100 Fund 0.926

SBI Bluechip Fund 0.939

ICICI Prudential Bluechip Fund 1.051

Franklin India Bluechip fund 1.056

DSP Top Equity Fund 1.059

ABSL Frontline Equity 1.067

Axis Bluechip Fund 1.145

Kotak Bluechip Fund 1.177

UTI Mastershare Unit Scheme 1.205

Reliance Large Cap Fund 1.414


Figure 6

0.000

0.500

1.000

1.500

Beta

Beta



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Interpretation:

The Beta of HDFC Top 100 fund i.e., 0.926 has less risk as compared to other schemes having

having moderate risk. The Beta of Reliance Large Cap Fund i.e., 1.414 has more risk as

compared to other schemes. Beta indicates that one percent change in the market return causes

one percent change in the fund return.

Table No. 14: Showing Alpha values of the Schemes

Schemes Alpha Rank

Axis Bluechip Fund 3.436 1

SBI Bluechip Fund 3.294 2

Reliance Large Cap Fund 2.926 3

ICICI Prudential Bluechip Fund 2.110 4

HDFC Top 100 Fund 1.699 5

Kotak Bluechip Fund 1.674 6

ABSL Frontline Equity 1.641 7

UTI Mastershare Unit Scheme 0.794 8

Franklin India Bluechip fund 0.198 9

DSP Top 100 Equity Fund -0.718 10


Figure 7

-1.000-0.5000.0000.5001.0001.5002.0002.5003.0003.500

Alpha

Alpha



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Interpretation:

The Alpha of Axis Mutual Fund is 3.436 which indicates that the Fund outer performed the

benchmark index. All other funds performed well in the market except DSP Top 100 equity fund

which shows negative Alpha.

Table No. 15: Showing Sharpe Ratios of the Schemes

Schemes SR

Ra

nk

Axis Bluechip Fund 0.614 1

ICICI Prudential Bluechip Fund 0.493 2

UTI Mastershare Unit Scheme 0.476 3

SBI Bluechip Fund 0.467 4

Reliance Large Cap Fund 0.461 5

HDFC Top 100 Fund 0.409 6

Kotak Bluechip Fund 0.386 7

ABSL Frontline Equity 0.382 8

Franklin India Bluechip fund 0.233 9

DSP Top Equity Fund 0.176 10


Figure 8

Interpretation: It is clear from the figure that all 10 samples of mutual fund schemes had

outperformed the benchmark return. The Sharpe Ratio is the measure of average return earned in

excess of the risk-free rate per unit of total risk. The Sharpe ratio of Axis Bluechip Fund is high

which is 0.614 and is also ranked 1 among performance of the scheme. High value of Sharpe

ratio indicates that the fund is performing well in respect to the risk associated with it. Whereas

the lowest value is of DSP Top Equity Fund which is 0.176. It indicates that the fund is not

performing well in response to the risk associated with it.

0.0000.1000.2000.3000.4000.5000.6000.700

Sharpe Ratio

Sharpe Ratio



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FINDINGS

Taking all factors into consideration i.e. Risk and Return, Investing in Mutual Fund is the

best for investors who wanted to seek Long Term Capital Gain.

All the funds returns have outperformed the Market Index Nifty 50 except DSP Top 100

Equity Fund.

When compared with the Standard Deviation, Reliance Large Cap Fund, Kotak Bluechip

Fund & SBI Bluechip Fund’s Standard Deviation is more making more dispersion in the data

and return with more spread from their Mean.

When compared with the Average Returns, All the funds have outperformed the Market

Index Nifty 50 except DSP Top 100 Equity Fund, During 5 years Reliance Large Cap Fund

has given highest average return i.e., 11.94% as compared to other Large Cap Funds.

On the basis of CAGR, Axis Bluechip Fund has given highest return i.e.,11.52% compared

to Nifty 50 and other Large Cap Funds followed by Reliance Large Cap Fund 11.26% .

According to Beta, the HDFC Top 100 Fund and SBI Bluechip Fund have very less

Volatility compared to other Funds.

Alpha is clearly denoting that all the funds have outer performed than the Market Index Nifty

50 except DSP Top 100 Equity Fund.

The Sharpe ratio of Axis Bluechip Fund is high i.e, 0.614 as compared to other funds and is

also ranked 1 among performance of the scheme. Whereas DSP Top Equity Fund has lowest

Sharpe Ratio i.e., 0.176.

SUGGESTIONS

From the study it is suggested that the investors can consider investment in Reliance Large

Cap Fund because it appears to be the best fund return over the period with highest return of

11.94%.

The investors are advised to invest their savings in Axis Bluechip Fund as this fund is

comparatively the best performing fund in terms of return &Sharpe index value.

Advice to the investors of ‘HDFC Top 100 fund’to continues as it is a less risky fund and has

a positive alpha value.

The study of fund ‘DSP Top Equity Fund’ returns down falling is indicated by negative alpha

value, hence investing in the same is not recommended to the investors.

CONCLUSION

Based on the above analysis, the main findings of the study are:

From foregoing performance analysis of the selected 10 equity large cap funds, it’s clear that

all the funds have performed well in terms of return during the study period expect DSP

Top100 Equity Fund.

According to Sharpe ratio, the average performance of Axis Bluechip Fund is best among the

selected large cap funds during the study period.

For taking decision in investing in mutual funds, the evaluation plays a vital role. The

rankings given to the Large Cap funds attract the investment by the investors.

Therefore it is essential for investors to consider statistical parameters like alpha, beta, and

standard deviation, Sharpe Ratio, CAGR while investing in mutual funds apart from



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considering NAV and TOTAL RETURN in order to ensure consistent performance of

mutual funds.

BIBLIOGRAPHY

(n.d.). Retrieved 08 08, 2019, from NSE :

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funds-in-india

AMFI. (n.d.). Retrieved 07 20, 2019, from AMFI: https://www.amfiindia.com/research-information/mf-

history

Bandopadhyay, D. B. (2011). Performance Evaluation of Schemes of Indian and International Mutual

Funds: An Empirical Study of selected Equity Large Cap Funds. Journal of Finance, Accounting

and Management, 2.

Bankbazaar. (n.d.). Retrieved July 26, 2019, from https://www.bankbazaar.com/mutual-fund/types-of-

mutual-funds.html

Bheemanagouda, P. Y. (2017). A Study on Performance of Large Cap Equity Mutual Funds in India. The

IUP Journal of Financial Risk Management, 14(4).

Dr.Waghamere, S. S. (2014). Performance Evaluation of Equity Oriented Large Cap Mutual Funds in

India. International Journal of Research in Finance & Marketing, 4(10).

Kabirdoss devi, D. &. (2013). A Study on Performance of Large Cap Equity Funds of Indian Mutual

Funds. Interconinental Journal of Finance Research Review.

Moneycontrol. (n.d.). Retrieved July 30, 2019, from

https://www.moneycontrol.com/news/business/mutual-funds/-1808199.html

Mr.Anoop, D. M. (2016). Comparative Study of selected Large Cap Equity Mutual Funds. International

Journal of Science Technology and Management, 5.

NSE. (n.d.). Retrieved August 08, 2019, from NSE:

https:www.nseindia.com/products/content/equities/indices/historical_index_data.htm

R.Nandhini, D. &. (2017). A Study on Performance of Equity Mutual Funds (with special reference to

equity large cap & mid cap mutual funds). IOSR Journal of Business and Management, 19(2).

Reliance Mutual Fund. (n.d.). Retrieved August 02, 2019, from Reliance Mutual Fund:

https://www.reliancemutual.com

Samyabranta Das. (2013). An Empirical Study on the Performance of select Large Cap Equity Mutual

Funds in India. MUDRA: Journal of Finance and Accounting, 2(1).

V.Rathnamani, D. &. (2013). Performance Evaluation of Equity Mtual Funds (On Seleted Equity Large

Cap Funds). International Journal of Business and Management Invention, 2(4).

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https://www.valueresearchonline.com/story/h2_storyView.asp?str=33469



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ANNEXURE

Title of the Graph

[The bellows are the reference number and title of the Graphs, which have been used in the

Report]

Figure 1 – The Cyclical process of the Mutual Fund operation In India.

Figure 2 – The Growth of Asset under Management over the years.

Figure 3 – Structure of Mutual Fund

Figure 4 – Types of Mutual Funds.

Figure 5 - Showing CAGR vales of 10 Large Cap Funds

Figure 6 – Showing Beta values of 10 Large Cap Funds

Figure 7 – Showing Alpha values of 10 Large Cap Funds

Figure 8 – Showing Sharpe Ratio values of 10 Large Cap Funds



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