An Analysis of Risk Measurement Techniques of Selected Mutual Fund Schemes in India

Abstract

In financial market Mutual Fund is the strongest financial intermediary which create a link between various securities market and investors (Prather, 2012; Vibha, 2014). The present study deals with the comparison and analysis of traditional measures and modern measures. In the present research, standard deviation and beta are considered as traditional measures while Treynor ratio and safety first ratio are considered as modern measures to evaluate risk techniques. Forecasting Techniques are used to determine the appropriateness of the traditional and modern risk measuring methods. For evaluating the risk measurement methods the debt funds, equity funds and hybrid funds are selected on the basis of CRISIL ranking. So the study helps to know the performance of particular funds. For The present study primary and secondary data had been collected to satisfy the proposed objectives of the study. The primary data was collected through the structured interview method from the investment managers / risk managers of the mutual fund houses. The data was collected from the 26 mutual fund houses of the New Delhi region which were selected randomly. Secondary data was collected from the Net Asset values of Equity fund, Debt fund and Hybrid fund schemes performed well according to the CRISIL rating of December, 2014. The various traditional, modern and forecasted risk measures methods are used to analyze the NAV values of selected mutual fund schemes from January 2011 to June 2016. In the present study the hypothesis was developed to evaluate the several risk measurement methods. There were various statistical techniques used to validate the hypothesis of the study. Z test is used to know the difference in the risk measurement techniques of the traditional measures and modern measures of mutual funds. ANOVA test is used to determine the average risk pattern of Debt Fund, Equity Fund and Hybrid Fund. From the study it was identified that different risk measuring techniques are adopted for Particular situations to evaluate the different types of mutual funds. There is a huge opportunity available for the investors, fund managers and every stakeholders of the mutual fund industry from the investments. newline