Hybrid mutual funds: An analysis

Mutual fund is a mechanism for pooling the resources by issuing units to the investors and investing funds in securities in accordance with objectives as disclosed in offer document. Investors need to know how risky individual assets are and what their contribution to the total risk of a portfolio would be. Plenty of Mutual Funds are available where the investors can put their money. Before investing they want to know which fund gives more return, which fund is performing well, which fund is more risky etc. All these can be found out using certain key statistics. With the help of these key statistics an investor can analyze different mutual funds and put his/her money in a fund which suits his/ her risk perception. Mutual fund returns can be compared using Arithmetic, mean & Compounded Annual Growth Rate. Risk can be analyzed by finding out Standard Deviation, Beta while performance analysis is based on Risk-Return adjustment. Key ratios like Sharpe ratio and Treynor ratio are used for Risk-Return analysis. Funds are compared with a benchmark, industry average, and analysis of volatility and return per unit to find out how well they are performing with respect to he market Value at Risk analysis can be done to find out the maximum possible losses in a month given the investor had made an investment in that month. Based on the quantitative study conducted company A fund is chosen as the best fund in the Balance fund growth schemes. Study shows that all the funds except one has outperformed the Benchmark in terms of compounded annualized growth rate.