IOSR Journal of Business and Management (IOSR-JBM) e-ISSN: 2278-487X, p-ISSN: 2319-7668. Volume 16, Issue 1. Ver. V (Feb. 2014), PP 92-101 www.iosrjournals.org www.iosrjournals.org 92 | Page A Comparative Study of Selected Public & Private Sector Equity Diversified Mutual Fund Schemes in India Dr. Vinay Kandpal l , Prof. P. C. Kavidayal 2 1 Assistant Professor, Department of Accounting & Finance, University of Petroleum & Energy Studies, Dehradun, India 2 Head, Department of Management of Studies, Bhimtal, Kumaun University, Nainital, India Abstract: This study is an effort to analyze the performance of selected Equity Diversified schemes with a view to see its impact on investor’s decision making. In this study 18 Equity Diversified Mutual Funds schemes are taken as sample and the selection of schemes was on the basis of Corpus size and Returns of last 5 years. The risk free rate taken is 5.5%. In order to give an increased return in domestic savings of investors and improvement in allocation of investment in different sectors, the need and scope for mutual fund as an investment option has increased immensely. Investment in Mutual fund is restricted to Tier 1 and Tier 2 cities whereas the rural and semi urban communities. One of the reasons behind it is lack of awareness in rural and semi urban areas. There is, therefore, a strong need for improving the awareness. The Private Sector Mutual Funds have recorded much better performance as compared to the Public sector Mutual Funds mainly due to better Funds allocation, better Management and efficient performance of Portfolio Manager. This result was arrived at after calculating and comparing the Sharpe, Treynor, beta and Jensen ratio. Keywords: Mutual Fund, Beta, Standard Deviation, Sharpe’s Index, Jensen I. Introduction Mutual Funds are essentially investment option where Asset Management Companies invest the funds invested by people with common investment purpose in different growing sectors. Investment in Mutual funds is managed by an efficient team of portfolio managers. They provide diversification, professional management and the ease of investment process for an investor who lacks the expertise in investment in capital market. With the introduction of a wide range of products, the mutual fund industry nowadays has a lot to offer to its investors. India is emerging as the next big investment destination, riding on a high savings and investment rate, as compared to other Asian economies. The house-hold segments have immense scope for attracting investments. Since opening up of the mutual fund to the private sector in 1990’s the industry is adapting itself continuously to the changes that have come along. Assets under Management (AUM) have grown at CAGR of 28% over the last four years, slowing down only over the last two years, as fallout of the global economic slowdown and financial crisis. In present dynamic and changing market environment, mutual funds are looked upon as a transparent and low cost investment option which attracts the investor attention helping the growth of the industry. There is a strong need for improving the awareness especially among the semi urban and rural communities where they hardly know the benefits of investing in Mutual Funds. They are still investing in traditional investment options. It is important to study about the returns given by AMC Mutual Funds and analyse their performance. II. Objective of the Study In this study an effort has been made to analyze the performance of selected Equity Diversified schemes with a view to see its impact on investor’s decision making. The major objectives of the study are as follows: 1. To examine the sensitivity of selected Equity Diversified Mutual fund schemes to the market fluctuations. 2. To compare and analyze the Equity-Diversified Mutual Fund schemes of select mutual fund players as suggested by Sharpe, Treynor and Jensen. 3. To compare the growth in Equity-Diversified Mutual Fund schemes with Industry average. III. Literature Review A description of the theoretical literature analysed is presented here to fix the basis for the study of risk involved in mutual fund returns and the need for regulating mutual funds. The works of Stigler (1971) and Posner (1969) discuss the general theoretical approaches to regulation. Stigler (1971) feels that the demand for regulation is not often for 'public benefit but rather for the benefit of the industry in question. The states coercive power allows it to tax, control entry, effect make policies which affect complements or substitutes or even fix prices. Such power; can be 'bought' by 'industries in' return for campaign funds to restrict competition or ensure