An Investigation into the Risk-Return Profile of Mutual Funds in India

Abstract

The objective of this paper is to assess the performance of Mutual Funds and investigate whether variations in Mutual Funds returns are attributable to their respective investment domains or other factors. The study analyzes the Net Asset Values (NAV) data of six Mutual Funds over a three-year period using statistical tools, as well as Beta, Sharpe's, and Treynor Indices. Two Mutual Funds are selected from each investment domain: all Equity Mutual Funds, Hybridequity oriented Mutual Funds, and Hybrid-debt oriented Mutual Funds. The findings indicate that Hybrid–equity oriented Mutual Funds exhibit the highest returns compared to all Equity Mutual Funds and Hybrid-debt oriented Mutual Funds. Conversely, Hybrid-debt oriented Mutual Funds demonstrate the lowest total risk relative to all Equity Mutual Funds and Hybrid– equity oriented Mutual Funds. Through the application of ANOVA, it is deduced that Mutual Funds returns significantly vary across different investment domains.