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The IUP Journal of Financial Risk Management
An Analysis of Mutual Fund Performance with Respect to Investor Decision Making
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The present paper is an attempt to analyze the performance of various mutual fund schemes with respect to investor decision making. The mutual funds have been selected on the basis of CRISIL rankings for the period ending December 2016. The top three ranked schemes under various categories of mutual funds have been selected for analysis. The data compiled from CRISIL is used to predict the future performance which will aid the investor in making an attainable portfolio where his risk and return are optimized. Measures like standard deviation and returns are put to chi-square analysis and further used for basing the future investment decisions with respect to investor perspective. The results of the research display optimum risk-return relationship and identify a diversified portfolio which an investor can make so far as his decisions regarding investments in mutual funds are concerned. The paper attempts to predict the future performance of mutual funds based on the assumptions that are available in the financial markets.

 
 
 

In the last few years, numerous innovative offerings have emerged in the financial markets looking at the growing needs of consumers. The increase in education, knowledge, awareness, and extensive use of social media has caused a shift in the minds of consumers so far their financial goals are concerned. They are ready to sacrifice certain present value to secure the uncertainties of future. The principle of having a diversified investment portfolio leads to maximizing returns and minimizing risk. Several securities are aimed at pooling little funds from small investors and managing them professionally over varied spread of investment options available in the market. Mutual fund, one such financial innovation, provides for a novel way of mobilizing savings from small investors and allowing them to participate in the equity and other securities of the industrial organizations with less risk. Hence, it is the most suitable form of investment for the common man as it offers an opportunity to invest in a diversified, professionally managed basket of securities at a relatively low cost. Since the market comprises investors with varied risk aptitudes, the mutual fund schemes offer varied products to satisfy the same. This gives the investors a chance to make an optimum mix that satisfies their respective goals. The investors choose among various investment strategies as per their goals so far as investment management is concerned.

 
 
 

Financial Risk Management Journal, Chi-Square Analysis, Limitations, Scope for Future Studies.