Macro-Economic Factors affecting Mutual funds in India

&
Basis for Evaluating Mutual fund Performance
By

Amit Gera
PGDM 2006-2008 Batch
Alliance Business School
Bangalore

Abstract

A mutual fund is a form of collective investment that pools money from investors and invests the
money in stocks, bonds, short-term money-market instruments, and/or other securities. The portfolio
manager trades the fund's underlying securities, realizing a gain or loss, and collects the dividend or
interest income. The investment proceeds are then passed on to the individual investors.

The rationale behind a mutual fund is that there are large number of investors who lack the time and
or the skills to manage their money. Hence professional fund managers, acting on behalf of the Mutual
Fund, manage the investments (investor's money) for their benefit in return for a management fee.
The organization that manages the investment is called the Asset Management Company (AMC). Thus
a Mutual Fund is the most suitable 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.

There are certain criteria on the basis of which the performance of a mutual fund can be assessed such
as NAV, portfolio turnover, risk and return as well as various expense ratios like Sharpe ratio, Beta
Ratio, etc. This article also aims to give an insight on the futuristic outlook of the Mutual Funds in India.
New Funds are coming in the market such as Gold Funds, Real Estate Funds etc. The various new
trends in the field are explored to understand diversified growth and opportunities that are prevalent
and that could be the probable future of Mutual Funds.

Introduction

The most important factor shaping in today's global economy is the process of globalization. Indian
companies are moving in search of low-cast markets, technology is driving growth in production and
competition is becoming more intense. A second factor is the fastest growth in private capital flows,
mainly short-term flows by banks and financial institutions, portfolio flows by mutual funds and pension
funds and foreign direct investment into India. A third factor is the increasing share of India and other
emerging market economies in world trade.

The outburst in communication technology has led to greater integration of Indian financial markets
across the world. The impact of these changes could be felt from the extremely buoyant activity in
Indian stock markets. A number of foreign financial service providers have entered into the Indian
financial market like Morgan Stanley, Templeton, and Goldman Sachs. Currently FII investment is at $
6.5 Billion compared to $ 2 Billion in 2001. The stock market is booming with Sensex hovering around
16000-17000. SEBI has put in place appropriate guidelines and controls to regulate the markets in
tune with the changing environment and attendant risks. All this is happening because of large
amounts of investment in the country

People often invest in various asset classes to:

* To beat Inflation
* To fund future needs
* To meet contingencies
* To maintain same standard of living after retirement

All these factors matters a lot to the investors and the mutual fund route is one way through which
people can meet these needs.

What Is a Mutual Fund?

SEBI (Mutual Fund) Regulations 1993 defines Mutual Fund as "a fund established in the form of a trust
by a sponsor to raise money by the trustees through the sale of units to the public under one or more
schemes for investing securities in accordance with these regulations".

In common terms, a mutual fund is a portfolio of stocks, bonds, or other securities that is collectively
owned by hundreds or thousands of investors and managed by a professional investment company.
The unit holders are people who have similar investment goals. Each fund has specific investment
criteria, which are spelt out in its prospectus, the official booklet that describes the mutual fund.
Investors then know what they are getting and can match their objective to that of a fund. The pooled
money has more buying power than one investor alone, so that a fund can own hundreds of different
securities. Thus, its success is not dependent on how just one or two companies perform but on
performance of several stocks which fund is holding.

A mutual fund makes money in several ways:

* By earning dividends or interest on the investments it owns

* By selling securities that have appreciated in value.

Investors make money in the form of dividends and interest that are passed on to them and the
increase (or decrease) in the fund's value. The mutual fund manager keeps constant watch on financial
markets and adjusts the portfolio to achieve the highest returns. By owning part of a fund, the hard
work of selecting and monitoring stocks and bonds is done for investors. The majority of mutual funds
available are open-ended funds. Open-ended funds can have an unlimited number of investors or
money in the fund. These funds are always open to accept money from investors and to return the
money back to investors. This gives the investor the flexibility to enter into the scheme or to exit from
the scheme or to exit from the scheme as and when required as per their needs. Managers of closed-
end funds, on the other hand, decide upfront how many shares they will issue and when they will sell
them. The only way to purchase shares in a closed-end fund, once the original shares have been sold,
is to buy them from a current investor. Occasionally, open-end funds can and do close to new
investors, often because of high cash inflows that cannot be invested in a timely manner. They do not
become closed-end funds, however, because current shareholders can still buy additional shares from
the fund company. When investors purchase a mutual fund, they own a piece of an investment
portfolio. They share in the gains, losses, and expenses in proportion to the amount they have invested
in the fund. At the close of every trading day, a mutual fund company tallies the value of all the
securities in its portfolio and deducts its expenses (e.g., management fees, administrative expenses,
and advertising costs). The balance is divided by the number of shares owned by shareholders to arrive
at the value of one unit of the mutual fund. The net asset value or NAV is the price that fund pays you
per unit when you sell. For a majority of people, mutual funds are a major part of their investment
portfolio-unless they have a lot of money and ample time to devote to investing in individual securities.

Why Mutual Funds not Individual Securities?

People prefer mutual fund and not individual securities because first, a great deal of time and expertise
is required to analyze a company—its prospects for earnings growth, its performance over the short
and long term in comparison to its competitors, its debt level and creditworthiness, its new products in
the pipeline, and technological changes looming that might harm or improve business. Second,
purchasing individual securities involves higher transaction costs. Even when you use a discount
broker, the commissions you pay to buy and sell are not cheap. Third, owning individual stocks means
you are less likely to have proper diversification. To diversify a stock portfolio, you need to own at least
10 to 20 different companies in different industries, which could cost very much. For the same price
you might pay for 100 shares of one security, you can buy units in a fund that owns 100 securities.
Diversification lowers your investment risk—if one or two stocks plunge, others may gain in value,
offsetting the loss.

How Mutual Fund Works

In India, SEBI (Mutual Fund) Regulations, 1996 regulates the structure of mutual funds. Mutual funds
in India are constituted in the form of a Public Trust created under The Indian Trusts Act, 1882. As per
these regulations, mutual funds should have the following three-tier structure:

* Sponsor
* Trust / Trustee
* Asset Management Company

Types of mutual fund schemes

By Structure By Investment Objective

Open-end Funds Growth Funds
Closed-end Funds Income Funds
Interval Funds Balanced Funds

Macroeconomic Factors Affecting Mutual Fund Industry in India

The macroeconomic factors are the major determinant of the growth of an economy. Analyzing the
macroeconomic factors gives an idea of the current economy position and a projection of the future of
the economy based on which we decide the future of a particular industry. The various macroeconomic
factors responsible for mutual fund industry in India are as follow:

Population

India's population is young, with 54% under the age of 25 and 80% under 45 and the percentage of
working population is rising rapidly.

Source: UN, CLSA Global Growth in Working-Age Population (15-64) over next 5 Yrs (bn)

A younger and working age population means –

* Income levels to rise

* Higher savings and consequent flows into equity markets
* Increased household consumption
* Significant increase of labor supply
* Large population and favourable demographics

Movement in Global Markets

If we see the position of BSE Senex as compared to other major indexes in the world then we find that
BSE has been the best performer.

Source: www.Bloomberg.com

This is the major factor which has contributed to mutual fund emerging as a great investment vehicle
for every category of investors and made mutual fund one of the most preferable way to generate
return. Mutual fund invest in equity of various companies for long time and long investment in equities
can help investors in generating good returns If we look the graph then we can say that equities have
the potential to deliver good return if we invest for long term.
India – Potential 'Services Capital' of the World

With services becoming increasingly tradable, India is well placed in terms of costs and skill
sets and over the past 13 years. From 1991-2005, India's services sector growth has
averaged 7.6% year compared with 5.7% for manufacturing. Figure-3 shows the composition of GDP
from which it is clear that composition of service and industry sector has increased in GDP over the
years.

Source: www.rbi.org.in

Inflation affects the Return

Inflation has always been one of the most important macroeconomic factor affection the country. It
represents the general price level of the country Inflation has always lowered the actual return from
bank savings except the year 2002

* Returns on safe fixed income options such as bank deposits have been moderating.
* Assured' return products are being phased out.
* Inflation and taxes are impacting returns.

Source: Bank deposit rate-RBI Inflation- CitiGroup

Impact of Various Changes

With the increase in global trade and finance, there is a need for level playing field as the WTO has
laid down common rules to facilitate smooth trade among member countries irrespective of their size.
Fall out of globalization is the increase in volatility and vulnerability of markets. This environment crisis
also spreads quickly and there is a greater danger of contagion than even before.

In order to detect timely fault lines in the global financial markets and put in place appropriate
corrections, the adoption of international standards and global benchmark becomes important. It is in
this context, effective management of risks assumes critical importance to all the constituents of the
financial sector and Indian mutual funds industry is not an exception. Mutual funds have been a
significant source of investment in both government and corporate securities. It has been for decades
the monopoly of the state with UTI being the key player, with invested funds exceeding Rs.300 bn.
(US$ 10 bn.). The state-owned insurance companies also hold a portfolio of stocks. Presently,
numerous mutual funds exist, including private and foreign companies.

Banks-mainly state-owned too have established Mutual Funds (MFs). Foreign participation in mutual
funds and asset management companies is permitted on a case by case basis. UTI, the largest mutual
fund in the country was set up by the government in 1964, to encourage small investors in the equity
market. UTI has an extensive marketing network of over 35,000 agents spread over the country. The
UTI scrips have performed relatively well in the market, as compared to the Sensex trend. However,
the same cannot be said of all mutual funds. But Indian households seem uncomfortable with the
concept of market-related returns which is clear from Table-1 which shows the composition of financial
savings among Indian household.

From Table-1 it is clear that Indian households save 4.9% of their financial savings on shares,
debentures and mutual fund. If we find saving on mutual fund then it will come around 2% which is
very less as compared to mutual fund investors in USA who save around 30% of their financial savings
on mutual fund. This is because of their less risk appetite nature.

In parallel if we see Figure-1 above then it shows that mutual fund business is growing tremendously in
India. This is only because some AMCs have done very well in the market. So it is clear that if AMCs do
well in the market then the mindset of Indian investors could be change who think stock market
investment very risky and who are still saving around 47% of their financial savings on fixed deposit.

Table-1

Area of Investment Rs. Crs. % to Financial Saving

Deposits (banks & others) 278985 47.4
Shares, debentures & mutual funds 29008 4.9
Investments in small savings 72364 12.3
Insurance 83340 14.2
Others (Investments in Government Securities (2.4%), Currency 124959 21.23
(8.8%), Provident and Pension Funds – 10%)
Source: www.rbi.org.in
Source: RBI, 2005-06Annual Report

There are four phases of mutual fund industry in India, first from 1964-1987, second from 1987 to
1993 when public sector companies entered into the business and the fourth phase is 2003 onwards.
The graph shows that there is a tremendous increase in the amount of assets managed through mutual
fund and with the entry of more and more foreign AMCs in India; this industry has a bright future in
India. In fourth phase of the mutual fund industry there is a sharp increase in the business of AMCs
Now investors have so many schemes with different objective and thus getting schemes according to
their investment objective.

Table-2 and Table-3 show the pattern of worldwide total net assets of mutual fund and worldwide
number of mutual fund from 1998 to 2005 respectively. From Table-2 it is clear that total net assets of
mutual fund has grown by 366.85% in India between 1998-2005 as compared to 85.22% growth in
worldwide, 66.42% in America, 118.85% in Europe and 99.525% in Asia and pacific total net assets
of mutual fund in same time period. Although the total figure is very less as compared to other
developed countries but the growth rate if high. This is because of less knowledge about mutual fund
among Indian investors. Similarly from Table-3 it is clear that total number of mutual funds has
increased by 358.76% in India from 1998-2005.

Evaluation Parameters

Following are the evaluation parameters on the basis of which the analysis and comparison of various
equity schemes is done.

Net Asset Value (NAV)

The value of a collective investment fund based on the market price of securities held in its portfolio.
NAV per share is calculated by dividing net assets of the scheme /number of Units outstanding.

Assets under Management

It is used to gauge how much money a fund is managing. Mutual Funds use this as a measure of
success and comparison against their competitors; in lieu of revenue or total revenue they use total
'assets under management'.

The difference between two AUM balances consists of market performance gains/(losses), foreign
exchanges movements, net new assets (NNA) inflow/(outflow) and structural effects of the company.
Investors are mainly interested in the NNA, which indicate how much money from clients had been
newly invested. Furthermore, it's common to calculate the key figure 'NNA growth', which shows the
NNA in relation of the previous AUM balance (annualized).
Expense Ratio

Expense ratio states how much you pay a fund in percentage term every year to manage your money.
For example, if you invest Rs 10,000 in a fund with an expense ratio of 1.5 per cent, then you are
paying the fund Rs 150 to manage your money. In other words, if a fund earns 10 per cent and has a
1.5 per cent expense ratio, it would mean an 8.5 per cent return for an investor. Funds' NAVs are
reported net of fees and expenses; therefore, it is necessary to know how much the fund is deducting.
Since this is charged regularly (every year), a high expense ratio over the long-term may eat into your
returns massively through power of compounding. Different funds have different expense ratios. But
the Securities & Exchange Board of India has stipulated a limit that a fund can charge. Equity funds can
charge a maximum of 2.5 per cent, whereas a debt fund can charge 2.25 per cent of the average
weekly net assets.

The largest component of the expense ratio is management and advisory fees. From management fee
an AMC generates profits. Then there are marketing and distribution expenses. All those involved in the
operations of a fund like the custodian and auditors also get a share of the pie. Interestingly, brokerage
paid by a fund on the purchase and sale of securities is not reflected in the expense ratio. Funds state
their buying and selling price after taking the transaction cost into account. Recently, funds have
launched institutional plans for big-ticket investors, where the expense ratio is relatively lower than
normal funds. This is because the cost of servicing is low due to larger investment amount, which
means lower expenses. A lower expense ratio does not necessarily mean that it is a better-managed
fund. A good fund is one that delivers a good return with minimal expenses.

Portfolio Turnover

Each buys and sell transaction in the stock markets involves a brokerage cost. This brokerage cost has
to be borne by the mutual fund, which in turn passes it on to its investors. So investors have to pay for
the trading carried out by the fund on their behalf. Obviously, higher the volume of trading, greater will
be the associated costs. And greater trading costs can definitely reduces returns. So how does one
know how much the fund manager is trading? The answer to this question is provided by the turnover
ratio. The turnover ratio represents the percentage of a fund's holdings that change every year. To put
it simply, a turnover rate of 100 per cent implies that the fund manager has replaced his entire
portfolio during the period given. Higher the turnover ratio, greater is the volume of trading carried out
by the fund.

Is a high turnover bad? Well, that depends on what it achieves. If high turnover can generate high
returns, then there should be no problems. The problem arises when a fund is trading heavily and not
generating commensurate returns. The turnover ratio is more important for equity funds where the
trading cost of equities is substantial. So, each time a fund manager buys and sells, he has to keep in
mind that the cost of buying and selling will eat into the fund's returns.

Standard Deviation

Standard deviation is a measure of total risks of a fund. In other words it measures the volatility of
returns of a fund. It indicates the tendency of the funds NAV to rise and fall in a short period. It
measures the extent to which the NAV fluctuates as compared to the average returns during a period.

A fund that has a consistent four –year return of 3% for example would have a mean or average, of
3%. The standard deviation for this fund would then be zero because the fund's return in any given
year does not differ from its four year mean of 3%. On the other hand, a fund that in each of the last
four years returned -5%, 17%, 2%, and 30% will have a mean return of 11%. The fund will also
exhibit a high standard deviation because each year the return of the fund differs from the mean
return. The fund is therefore more risky because it fluctuates widely between negative and positive
returns within a shorter period. A higher standard deviation means that the returns of the fund have
been more volatile than a fund having low standard deviation. In other words high standard deviation
means high risk.

Sharpe Ratio

The Sharpe ratio represents trade off between risk and returns. At the same time it also factors in the
desire to generate returns, which are higher than those from risk free returns. Mathematically the
Sharpe ratio is the returns generated over the risk free rate, per unit of risk. Risk in this case is taken
to be the fund's standard deviation. As standard deviation represents the total risk experienced by a
fund, the Sharpe ratio reflects the returns generated by undertaking all possible risks. It is thus one
single number, which represents the trade off between risks and returns. A higher Sharpe ratio is
therefore better as it represents a higher return generated per unit of risk.

Sharpe ratio provides an unbiased look into fund's performance. This is because they are based solely
on quantitative measures. However, these do not account for any risks inherent in a funds portfolio.
For example, if a fund is loaded with technology stocks and the sector is performing well, then all
quantitative measures will give such a fund high marks. But the possibility of the sector crashing and
with it the fund sinking is not calculated. In view of these possibilities quantitative tools should be used
along with information on the nature of the funds strategies, its fund management style and risk
inherent in the portfolio. Quantitative tools can be used for screening but they should not be the only
indicator of a fund's performance.

The Sharpe ratio is one of the most useful tools for determining a fund's performance. This measure is
used the world over and there is no reason why you as an in investor should not use it.

Beta

Beta is a statistical measure that shows how sensitive a fund is to market moves. If the Sensex moves
by 25 per cent, a fund's beta number will tell you whether the fund's returns will be more than this or
less. The beta value for an index itself is taken as one. Equity funds can have beta values, which can
be above one, less than one or equal to one. By multiplying the beta value of a fund with the expected
percentage movement of an index, the expected movement in the fund can be determined. Thus if a
fund has a beta of 1.2 and the market is expected to move up by ten per cent, the fund should move
by 12 per cent (obtained as 1.2 multiplied by 10). Similarly, if the market loses ten per cent, the fund
should lose 12 per cent.

Each dot represents a fund's returns plotted against the market returns in the same period. The line is
the beta of these returns. While the beta is same in both, it is far more representative of the returns in
the left graph then right one. This shows that a fund with a beta of more than one will rise more than
the market and also fall more than market. Clearly, if you would like to beat the market on the upside,
it is best to invest in a high-beta fund. But you must keep in mind that such a fund will also fall more
than the market on the way down.

Similarly, a low-beta fund will rise less than the market on the way up and lose less on the way down.
When safety of investment is important, a fund with a beta of less than one is a better option. Such a
fund may not gain much more than the market on the upside; it will protect returns better when
market falls.

Essentially, beta expresses the fundamental trade-off between minimizing risk and maximizing return.
A fund with a beta of 1 will historically move in the same direction of the market. A beta above 1 is
more volatile than the overall market, while a beta below 1 is less volatile. So while you can expect a
high return from a fund that has a beta of 2, you will have to expect it to drop much more when the
market falls. The effectiveness of the beta depends on the index used to calculate it. It can happen that
the index bears no correlation with the movements in the fund.

R-squared

But the problem with beta is that it depends on the index used to calculate it. It can happen that the
index bears no correlation with the movements in the fund. Thus, if beta is calculated for large cap
fund against a mid-cap index, the resulting value will have no meaning. This is because the fund will
not move in tandem with the index. Due to this reason, it is essential to take a look at a statistical
value called R-squared along with beta. The R-squared value shows how reliable the beta number is. R-
squared values range between 0 and 100, where 0 represents the least correlation and 100 represents
full correlation. If a fund's beta has an R-squared value that is close to 100, the beta of the fund should
be trusted. On the other hand, an R-squared value that is close to 0 indicates that the beta is not
particularly useful because the fund is being compared against an inappropriate benchmark.

Thus, an index fund investing in the Sensex should have an R-squared value of one when compared to
the Sensex. For equity diversified funds, an R-squared value greater than 0.8 is generally accepted to
mean that the underlying beta value is reliable and can be used for the fund.

P/E Ratio

A valuation ratio of a company's current share price compared to its per-share earnings. It is
calculated as:

Also sometimes known as "price multiple" or "earnings multiple". Companies with higher growth rates
command higher P/E ratios. Confidence that a company will improve its profitability or remain
profitable generally results in a higher P/E ratio. If profits are threatened or weak, the P/E ratio is likely
to drop.

P/B Ratio

A ratio used to compare a stock's market value to its book value. It is calculated by dividing the current
closing price of the stock by the latest quarter's book value per share. It is also called as "Price to
Equity Ratio". It is calculated as:
A lower P/B ratio could mean that the stock is undervalued. However, it could also mean that
something is fundamentally wrong with the company. As with most ratios, this varies by industry. This
ratio also gives some idea of whether you're paying too much for what would be left if the company
went bankrupt immediately.

Future of Mutual Fund Industry in India

Why Invest in Gold?

Historically, gold has been a proven method of preserving value when a national currency was losing
value. If your investments are valued in a depreciating currency, allocating a portion to gold assets is
similar to a financial insurance policy. In the past year, the climb in the price of gold above $700 per
ounce is due to many factors, one being that the dollar is losing value.

Reasons favoring to invest to Gold

* The dollar is weak and getting weaker due to national economic policies which don't appear to have
an end.

* Gold price appreciation makes up for lost interest, especially in a bull market.

* The last four years are the beginning of a major bull move similar to the 70's when gold moved from
$38 to over $800.

* Central banks in several countries have stated their intent to increase their gold holdings instead of
selling.

* All gold funds are in a long term uptrend with bullion, most recently setting new all-time highs.

* The trend of commodity prices to increase is relative to gold price increases.

* Worldwide gold production is not matching consumption. The price will go up with demand.

* Most gold consumption is done in India and China and their demand is increasing with their increase
in national wealth.

* Several gold funds reached all-time highs in 2006 and are still trending upward.

* The short position held by hedged gold funds is being methodically reduced.

Gold Mutual funds - A relatively safe method of buying and owning gold stocks allows the owner to
diversify among many stocks and allows the investing decisions to be made by a professional.
Investment methods vary among funds and provide many different styles of portfolio management for
an investor to choose from. Prices move faster and further in both directions than the price of gold.

* Provide professional management and diversification within the gold sector.

* Are more volatile than the S&P index.

* May or may not have any correlation with the general market.

* Move daily with the price of gold, but not always.

* Move proportionally more than gold, up and down.

* If you believe in 'buy low, sell high', gold is still low, but climbing.

The real estate sector and the road ahead

Real Estate Mutual Funds ('REMFs')

The SEBI Board has now approved the guidelines for the much awaited Real Estate Mutual Funds. "Real
Estate Mutual Fund Scheme" is defined to mean a scheme of a mutual fund which has investment
objective to invest directly or indirectly in real estate property.

Governing Law

It is proposed that REMFs will be governed by the provisions and guidelines issued under SEBI (Mutual
Funds) Regulations. REMFs, shall initially, be close ended. The units of REMFs shall be compulsorily
listed on the Stock Exchanges and Net Asset Value (NAV) of the scheme shall be declared daily.

Custodian

The REMFs would be required to appoint a Custodian who has been granted a Certificate of Registration
to carry on the business of Custodian of securities by the SEBI Board. The custodian would safe keep
the title of real estate properties held by the REMFs.

Investment Criterion:

It is proposed that REMFs could invest in the following: -

* Directly in real estate properties within India;

* Mortgage (housing lease) backed securities;

* Equity shares / Bonds / Debentures of listed / unlisted companies which deal in properties and also
undertake property development; and in

* Other securities

The onset of Interval funds

The Securities and Exchange Commission passed a rule today establishing a new type of mutual fund
that allows investors to cash out periodically without having to sell at less than the fund's net asset
value. There are currently two types of funds: open-end funds, which allow investors to sell their
shares back to the funds at any time, and closed-end funds, which issue fixed numbers of shares that
trade in the secondary market. The shares of a closed-end fund can trade at a discount to the
underlying value of a fund's portfolio.

The newly established "interval" funds will allow investors to sell their shares back to the fund at
specified intervals -- every quarter, for instance. Currently, open-end funds have to redeem shares
within seven days, meaning the funds must hold onto cash that could otherwise be used for investment
in case a holder wants to sell shares.

Because closed-end funds do not offer redeemable shares, investors in the funds who want to sell their
holdings must do so in the secondary market, where prices may be below net asset value.

Challenges for Indian Mutual Fund Industry in India

The Indian mutual fund industry needs to widen its range of products with affordable and competitive
schemes to tap the semi-urban and rural markets in order to attract more investors.
The industry has still not been able to penetrate among retail investors and it needs to share best
practices from mature markets like US and Britain where mutual funds are the most preferred form of
investment. Mutual fund companies need to introduce products for the semi-urban and rural markets
that are affordable and yet competitive against low-risk assured returns of government sponsored
saving schemes such as post office saving deposits.
The industry is also overwhelmed by scarce technological infrastructure and needs to collaborate with
other sectors of the economy such as banking and telecommunications.
Mutual fund companies are also required take advantage of the growing opportunity in the
commodities market. Further, the mutual funds could also enable the small investors to participate in
the real estate boom through real estate mutual funds. With a strong regulatory framework, clear
guidelines and the talent to back it up, the Indian mutual fund industry is in a position to cater to the
new breed of investors who are keen to diversify their risks.

References

* www.amfiindia.com

* www.valueresearchonline.com

* www.mutualfudsindia.com

* www.sharekhan.com

Publications/news

* Sharpe, W.F. (1966). Mutual Fund Performance. Journal of Business, 39, 119-138.

* Sharpe, W.F. (1994). The Sharpe Ratio. Journal of Portfolio Management, 20, fall, 49-58

Amit Gera
PGDM 2006-2008 Batch
Alliance Business School
Bangalore

Source: E-mail September 27, 2007

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