An Empirical Study on ‘Mutual Fund’ as an Investment Avenue (A Case Study on Selected Mutual Fund Companies)

Abstract

In the post-economic reform era the concept Systematic Investment Plan has emerged as a new tool for investment. Stock market plays a very vital role in developing economy like India. Investment through the mutual fund has become one of the investment avenues for the small investors and also attracting the rural people in recent years. Investors usually perceive that all capital market investment avenues are risky. Based on objectives and risk bearing capacities, investors go for different investment alternatives. Among the various investment possibilities, mutual fund seems to be viable for all kind of investors as it is considered to be a safer mode of investment. This study is an attempt to understand the performance of share market and to analyse the correlation of performance of mutual funds with market indices like Sensex and Nifty. As a part of this study, data is collected regarding performance of mutual funds and stock market for the last year 2007–2008, 2008–2009 and 2009–2010. Top five mutual fund (growth) and 10 index funds are taken as sampling. Thus, it is analysed by using statistical tools such as arithmetic mean, standard deviation, correlation and testing hypotheses.