Mutual fund performance evaluation in India

This paper has sought to examine the mutual fund performance of the open-ended liquid schemes in India over the period from January 2001 to December 2011. The motivation of this study is that in India most of the researches have done with a shorter period of time and the performance of liquid schemes has got lesser amount of interest. Therefore, this type of schemes has been taken into consideration for the evaluation of performances. So, those schemes have been selected which are provided returns above the risk free rate. For this study, some popular risk-adjusted measures have been used namely Shape ratio, Treynor ratio, MM measure and information ratio as well as selectivity, market-timing and diversification performances have been examine by employing Jensen measure, T&M model and CAPM model. It has been observed form the analysis that the risk adjusted performances of the open-ended liquid schemes are positive. But, the managers are unable to reduce unsystematic risk by proper portfolio diversification activities. Similarly, the selectivity and market-timing performances of the openended liquid schemes are very unsatisfactory. The managers cannot outguess the security prices correctly and failed to outguess the market movement at right time.