An analysis of balanced mutual fund schemes

The Indian Mutual Funds Industry has witnessed a sea change since UTI was first established in 1964. From a single player the number of players has increased to 29 and the number of schemes has spiraled to more than 600 with managed assets of about Rs.5L crores. Investors need to know how risky individual schemes are and what would be its contribution to the total risk of a portfolio. Before investing investors would want to know which funds gives more return, which fund is performing well, which fund is more risky etc. The present study aims to answer these using certain key statistics. With the help of these key statistics an investor can analyze different mutual funds and put his/her money in a fund which suits his/her risk perception. A sample of 10 open ended balanced funds have been taken for the analysis. These selected funds were compared using Arithmetic mean, Compounded Annual growth rate for returns for returns generated on the investment. For the analysis of risk of these funds Standard deviation and Beta is used. For the performance on Risk-Return - Coefficient of variance has been used alongwith key ratios such as Sharpe ratio and Treynor ratio. Also, the sample funds are compared with a benchmark and industry average to find out how well they are performing with respect to the market. Based on the quantitative study conducted, the study shows that all the funds except one have outperformed the benchmark in terms of compounded annualized growth rate.