Validation of Selection Techniques of Mutual Fund Schemes In India

Abstract

Investment is necessary for saving and mutual fund can be treated as a vehicle of investment which is liked by all the ages of investors who want to take a ride on it. For doing so, they contribute in this vehicle depending on their risk and return appetite. The fund are invested in the vehicle is driven, controlled and managed by a fund manager. This investment fund uses capital market, money market and debt market to park its funds and get a return on the same. This investment opportunity is best suited for the investor’s class who wants a more diversified investment portfolio. In the modern times mutual fund is a big industry in which many private players are coming and trying to capture the growth. There are many schemes launched by the private players which are creating super normal growth for its investors. The various options in the mutual funds schemes have increased their acceptance to a large investor base. Therefore it is imperative to identify and select those schemes of mutual fund which are best in the lot and can offer better returns to the investors. This research paper has put an effort on validating the selection techniques of mutual fund in India on the basis of return and risk frontier. Paper discussed the basis of selection of all mutual fund schemes based upon highest net asset and ranking. The ranking of these mutual fund schemes are validated by calculating the monthly returns of the funds. Researchers considered data from different sources like yahoo finance, value research online, RBI, NSE etc for this study. After this study, researchers will try to help the investors to identify and select the mutual fund schemes carefully in their portfolio as all the mutual fund schemes even if they are on higher ranking may not perform well in the short run. This will help the investors in maximizing their returns.