Performance evaluation of selected sectoral mutual fund schemes in India: An in-depth risk-return analysis

Since long the performance of mutual funds has been receiving a great deal of attention from both practitioners and academics. With an aggregate investment of trillion dollars in India, the investing public's interest in identifying successful fund managers is understandable. From an academic perspective, the goal of identifying superior fund managers is interesting as it encourages development and application of new models and theories. The idea behind performance evaluation is to find the returns earned by the sectoral mutual fund schemes and the risk levels at which they are delivered in comparison with the market and the risk free rates. It is also the aim to identify the out-performers for healthy investments. The sectoral mutual fund schemes have been ranked on basis of risk and return analysis and for better evaluation of these schemes various risk-adjusted ratios like Sharpe ratio, Jensen Measure, Fama ratio, Treynor's ratio and few others are calculated. A little work has been done which merely concentrate on multiple measures of sectoral mutual fund scheme performance evaluation. This study is a type of exploratory research using four sectors namely infrastructure, power, banking and auto sector. Judgment sampling has been used to select the sectoral mutual fund schemes for analysis. In this light attempt has been made to capture the critical measures of performance evaluation of Sectoral mutual fund schemes.