Risk-return evaluation of ELSS Funds during 2008–11: An empirical analysis

Even though the Mutual Funds as an investment class, have been gaining awareness in the past years, it is still facing a challenge to survive and retain investor's interest. The recessionary period had an adverse impact on the growth, so much so, that the net resource mobilized by mutual funds reduced from a positive 11, 136 crore in 2007–08 to a negative 22, 355 crore in 2008–09 (source: SEBIhandbook 2009). The situation has although now improved. Evaluating the performance of mutual funds is thus a prime concern. An attempt has been made in this paper, to study the performance of a sample of tax saving mutual fund schemes (ELSS) and compare the performance of public and private sector funds. Ten schemes- three from public sector and seven from private sector have been evaluated. The net inflow in ELSS (Equity linked savings scheme) has been positive and increasing from 2005–06 to 2008–09 though it reduced during 2008–09 compared to 2007–08. The analysis has been made on the basis of mean return, beta risk, co-efficient of determination, Sharpe ratio, Treynor ratio and Jensen Alpha. The overall analysis finds Fidelity Taxadvantage fund the best performer among the ELSS funds and the private sector ELSS funds a better performer than public sector funds when compared against the risk-return models.