“Comparative Analysis of Top Large Cap Equity Mutual Funds in India”

CMA Jayraj Javheri1

Author
Assistant Professor, Department of MBA
Sanjivani College of Engineering, Kopargaon – 423 603
E- Mail: [email protected]
Ph.: 98235 83080

Mr. Pachpind Jayesh Sanjay (PMB21F1094)

Mr. Mr. More Jayesh Arun (PMB21M1088)
Mr. Narwade Abhishek Subhash (PMB21M1093)

1
Assistant Professor, Department of MBA, Sanjivani college of Engineering, Kopargaon, 423603

“Comparative Analysis of Top Large Cap Equity Mutual Funds in India”

ABSTRACT: -

This research paper aims to analyze the performance and characteristics of large-cap mutual funds. Large-
cap funds are an important component of the mutual fund industry, attracting significant investor interest
due to their potential for stable returns and lower risk compared to small and mid-cap funds. The study
examines a sample of large-cap mutual funds over a specific period and evaluates their risk-adjusted
performance, portfolio composition, and investment strategies. By conducting a comprehensive analysis,
this research provides valuable insights into the behavior and attributes of large-cap mutual funds, aiding
investors in making informed investment decisions.

Key words: Top Equity Mutual Funds in India, Risk and Return, Benchmark, Beta, Sharpe Ratio, Treynor
Ratio, Jenslon Alpha,

LITERATURE REVIEW

1. (Dr.K.M. Sudha, 2020) Conducted research on “Comparative Study on Selected Mutual Fund”. The
objective of the study is to comparative performance analysis fir selected mutual funds for five years
and also risks and returns of mutual funds. This study evaluates the analysis of returns that takes place
for five years and their volatility based on investment. The sources of data are secondary data. The
tools used for analysis are simple average method and standard deviation method and simple
comparative analysis method and ranking method. The findings that is not advisable to invest equity
fund category as the market undergoing fluctuations asset components are subject to high risk.
2. (Shivam Tripathi, Dr. Gurudutta P. Japee, March 2020) Conducted research on “Performance
Evaluation of Selected Equity Mutual Funds in India”. The objective of the study to know whether
mutual funds give reward to changeability and unpredictability and also identify security market
return with fund return. The data are secondary data is gathered from different sources like factsheets
of different AMCs and historical NAV and yearly return. The statistical tools Jenson‟s alpha, beta,
standard deviation and Sharpe ratio. The performance analysis of the selected 15 equity funds and
clearly identified that the 10 funds are performed well and 5 are not during the study.
3. (Anil Kumar Goyal, June 2018) Conducted research on “A comparative study of return of selected
mutual fund schemes with nifty50”. The objective of the study is to compare average long run mutual
fund of each selected company and also compare with the nifty50 with mutual fund. Research
methodology is based on secondary data of NAVs and nifty50 collected online for the period of one
year. The nifty50 price was collected from yahoo finance. Findings for this study is the selected

“Comparative Analysis of Top Large Cap Equity Mutual Funds in India”

 schemes is compared with the monthly average of long return of benchmark nifty50 and find that SBI
is better in terms of volatility and returns.
4. (Nadia, March,2018) Conducted research on “A Comparative Analysis of Mutual Fund Schemes”.
The objective is to analyze the risk and return of the selected fund schemes and compare the same
with BSE-Sensex and also compare the performance with the market index whether they are
outperforming or underperforming. The research methodology consists of primary and secondary
data. The secondary data collected from the various sources. The data are measuring through
standard deviation, beta, alpha and coefficient of determination. The result of this study is to find out
the 14 schemes are outperformed the benchmark returns.
5. (Rani, 2018) Conducted research on “Performance Analysis of Mutual Funds: A Study of Balanced
Schemes”. The purpose of the study is to examine the performance of selected public and private
sector mutual funds particularly for their balanced schemes during the study period. The data analysis
is basics quantitative results of selected schemes. This study provides the overall mutual fund industry
of India during a year of 2018.
6. (Dr M. Ravichandran, May 2017) Conducted research on “A study on performance evaluation
mutual fund schemes in India”. The objective of the research to identify the performance of
openended equity mutual fund schemes and measure the performance and analysis the risk and
return of their performance and also evaluate the future investment regarding open ended equity
scheme. The collection of data is on systematic basis for analysis. The data are collected from various
sources from the association of mutual fund India, BSE India etc. the tools and techniques for analysis
is used in this study is Sharpe ratio, Treynor ratio, Jensen ratio, beta and standard deviation. The
finding of this study is investigating the performance result useful for investors for taking better
investment decisions.
7. (Renuka, 2017) Conducted research on “A Comparative Study on Performance of Mutual Funds and
Its Schemes in India.” The research objective is to study about mutual fund and also idea about
regulation of mutual funds in India. The methodology is used the performance of selected funds is
evaluated using average return, standard deviation, beta and R-Square. This study provides some
insights on mutual fund performance so as to assist the common investors in taking the rational
investment decisions for allocating their resources in correct mutual fund schemes.
8. (N. Bhagyasree, April,2016) Conducted research on “A Study on Performance of Mutual Funds in
India”. The research objective is that the mutual fund is performing safe for the investor. The tools
and techniques are used in this research are Shape ratio, Treynor ratio, Jenson ratio, Beta, Standard

“Comparative Analysis of Top Large Cap Equity Mutual Funds in India”

 deviation. The result of this study is to find out the mutual funds were performing very safe for the
investors and also supervision to allow an investor to take the right decision.
9. Derbali, A., Elnagar, A. K., Jamel, L., & Ltaifa, M. B. (2020). This paper aims to compare the
performance of prominent multi-capital and large-capital funds. We examine the performance of 10
prominent funds under both the selected categories analyzed during the study period from 2013 to
2018. Their performance has also been compared against India's two most diversified benchmark
indices, BSE 200 and Nifty 500. We have also attempted to determine whether there is any
considerable difference in the performance of the two categories of funds or not. To do so, we employ
a One-way Analysis of Variance (ANOVA) for the comparison of mutual funds as an econometric
methodology for a period of study from 2013 to 2018 for a sample of 20 Indian mutual funds. From
the empirical findings, we find that the mutual fund schemes under both categories, such as Multi
Capital Funds and Large Cap Funds, have generated good returns over the period, with reasonable
risk. Therefore, it is safe to conclude that they are a good investment option for an investor.
10. Arora, R., & Raman, T. V. (2020). The paper attempts to analyze portfolio evaluation of selected
equity diversified schemes using volatility measures such as quantitative factors like Standard
Deviation, Beta and the ratios such as Sharpe, Treynor, Jensen’s Alpha, Information ratio, Fama’s
Measure, Expense ratio measures. Data for research are collected from the secondary data sources
and selected from 30 Mutual Fund schemes 10 AMCs.

INTRODUCTION

Mutual funds have gained immense popularity as investment vehicles due to their potential to offer
diversification, professional management, and accessibility to individual investors. Among the various
categories of mutual funds, large-cap funds hold a prominent position in terms of assets under
management and investor interest. Large-cap funds primarily invest in companies with large market
capitalizations, typically including industry giants and established corporations. These funds are often
perceived as relatively less risky compared to small and mid-cap funds, attracting conservative and risk-
averse investors.

The performance and characteristics of large-cap mutual funds have been subjects of interest and debate
among investors, academics, and financial professionals. Assessing the risk-adjusted performance of these
funds is crucial for investors to evaluate their potential returns relative to their level of risk. Additionally,
understanding the portfolio composition and investment strategies employed by large-cap fund managers

“Comparative Analysis of Top Large Cap Equity Mutual Funds in India”

can provide valuable insights into their decision-making processes and potential for consistent
performance.

This research paper aims to contribute to the existing body of knowledge on large-cap mutual funds by
conducting a comprehensive analysis of their performance and characteristics. The study utilizes a sample
of large-cap funds over a specific period, considering various risk-adjusted performance measures to
evaluate their relative performance. The portfolio composition and investment strategies of these funds
are analyzed through a thorough examination of their holdings and investment policies.

OBJECTIVES OF THE STUDY:

1. Evaluate the historical performance of selected large-cap equity mutual funds and compare
them to relevant benchmarks.
2. Analyze the risk profile of these funds by examining measures such as volatility, downside risk,
and beta.
3. To find the weak and strong areas of Selected Large Cap Equity Mutual Funds.

HYPOTHESIS: -

H1: There is significant Difference between the selected Equity Mutual Funds Standard Deviation.

H2: There is significant Difference between the selected Equity Mutual Funds Beta.

H3: There is significant Difference between the selected Equity Mutual Funds Sharpe.

H4: There is significant Difference between the selected Equity Mutual Funds Treynor Ratio.

H5: There is significant Difference between the selected Equity Mutual Funds Jenslon Alpha.

RESEARCH METHODOLOGY.

Covid has impact Mutal Funds very adversely due to the sudden slowdown in the economy. My paper
mainly focuses on the Measuring the performance of the selected Equity Mutual Funds in India. In a
comparative market there are multiple mutual funds working in the Indian market. It is necessary to know
mutual fund as the performance of the mutual fund decides the future of Mutual Fund Company. In my
study I have compared 5 Equity Mutual Funds with each other.The secondary data has been used for
analysis which is mainly taken from authentic sources such as ZCYC, Amfiindia, Money control, Yahoo
Finance etc. The data has been analyzed in tabular form, Trend analysis and anova test has been used to
find out significant difference.

“Comparative Analysis of Top Large Cap Equity Mutual Funds in India”

 DATA ANALYSIS

Table no 1
ANNUAL RATURN
Year Edelweiss HDFC ICICI Kotak Mahnidra Nippon India
2018-19 5% 17% 10% 10% 13%
2019-20 -19% -31% -25% -11% -32%
2020-21 80% 74% 77% 61% 74%
2021-22 22% 20% 21% 18% 23%
2022-23 0% 5% 3% 1% 5%
Source: (Amfiindia, ZCYC, Yahoo Finance)

ANNUAL RETURN
85%
75%
65%
55%
45%
35%
25%
15%
5%
-5% 2018-19 2019-20 2020-21 2021-22 2022-23
-15%
-25%
-35%
Edelweiss HDFC ICICI Kotak Mahnidra Nippon India

(Graph no 1)

INTERPRETATION:

Edelweiss scheme has shown a remarkable return of 80% in the year 2020-21. ICICI Equity Saving fund
also has shown a return around 77% in the same year. In 2022-23 this scheme gives less return.

Anova: Single Factor

SUMMARY
Groups Count Sum Average Variance
Edelweiss 5 0.875573893 0.175115 0.144379
HDFC 5 0.85 0.17 0.14265
ICICI 5 0.86 0.172 0.14062
Kotak 5 0.79 0.158 0.07547
Nippon 5 0.832644844 0.166529 0.146855

“Comparative Analysis of Top Large Cap Equity Mutual Funds in India”

 ANOVA
Source of Variation SS df MS F P-value F crit
Between Groups 0.000861 4 0.000215 0.001656 0.999994 2.866081
Within Groups 2.599897 20 0.129995

Total 2.600758 24

INTERPRETATION:

As P- Value is more than 0.05 we can conclude that there is no significant difference between Annual
Return of Selected Equity Mutual Funds.

Table no 2
STANDARD DEVIATION

Year Edelweiss HDFC ICICI Kotak Mahnidra Nippon India

2018-19 11% 13% 14% 12% 14%
2019-20 24% 27% 24% 26% 28%
2020-21 19% 22% 21% 20% 22%
2021-22 16% 15% 15% 14% 16%
2022-23 14% 19% 15% 14% 14%
Source: (Amfiindia, ZCYC, Yahoo Finance)

STANDARD DEVIATION

29%
27%
25%
23%
21%
19%
17%
15%
13%
11%
9%
7%
5%
2018-19 2019-20 2020-21 2021-22 2022-23

Edelweiss HDFC ICICI Kotak Mahnidra Nippon India

(Graph no 2)

“Comparative Analysis of Top Large Cap Equity Mutual Funds in India”

INTERPRETATION:

Nippon equity fund has the highest Annual standard deviation of more than 18% in the year 2019-20. In
the same year has a HDFC Equity fund also has a Annual standard deviation of 27%. Edelweiss Fund has
the least Standard deviation in all the years in comparison with all other funds.

Anova: Single Factor

SUMMARY
Groups Count Sum Average Variance
Edelweiss 5 0.84 0.168 0.00247
HDFC 5 0.96 0.192 0.00312
ICICI 5 0.89 0.178 0.00197
Kotak 5 0.86 0.172 0.00332
Nippon 5 0.94 0.188 0.00372
ANOVA
Source of Variation SS df MS F P-value F crit
Between Groups 0.002096 4 0.000524 0.179452 0.946364 2.866081
Within Groups 0.0584 20 0.00292

Total 0.060496 24

INTERPRETATION:

As P- Value is more than 0.05 we can conclude that there is no significant difference between Standard
Deviation of Selected Equity Mutual Funds

“Comparative Analysis of Top Large Cap Equity Mutual Funds in India”

 Table no 3
BETA

Year Edelweiss HDFC ICICI Kotak Mahnidra Nippon India

2018-23 0.04 0.40 0.36 0.36 0.38
Source: (Amfiindia, ZCYC, Yahoo Finance)

BETA
0.40
0.38
0.40 0.36 0.36
0.35
0.30
0.25
0.20
0.15
0.10 0.04
0.05
0.00
Edelweiss HDFC ICICI Kotak Nippon India
Mahnidra

2018-23

(Graph no 3)

INTERPRETATION:

Annual beta of HDFC equity fund was the highest in the year 2018-23. Where as the second highest beta
is of Nippon Equity fund and ICICI as well as SBI Equity fund in the same Beta.

Table no 4
SHARPE RATIO

Year Edelweiss HDFC ICICI Kotak Mahnidra Nippon India

2018-19 -63% -40% -43% -52% -40%
2019-20 -46% -55% -52% -36% -55%
2020-21 45% 74% 45% 27% 44%
2021-22 -22% 20% -26% -33% -21%
2022-23 -21% 5% -45% -50% -46%
Source: (Amfiindia, ZCYC, Yahoo Finance)

“Comparative Analysis of Top Large Cap Equity Mutual Funds in India”

 SHARPE RATIO
70%
60%
50%
40%
30%
20%
10%
0%
-10% 2018-19 2019-20 2020-21 2021-22 2022-23
-20%
-30%
-40%
-50%
-60%
-70%

Edelweiss HDFC ICICI Kotak Mahnidra Nippon India

(Graph no 4)

INTERPRETATION:

If we compare the risk and return than the performance HDFC Equity and Nippon is far better than all
other funds.

Anova: Single Factor

SUMMARY
Groups Count Sum Average Variance
Edelweiss 5 -1.07 -0.214 0.16863
HDFC 5 0.04 0.008 0.26307
ICICI 5 -1.21 -0.242 0.15877
Kotak 5 -1.44 -0.288 0.10427
Nippon 5 -1.18 -0.236 0.15833
ANOVA
Source of Variation SS df MS F P-value F crit
Between Groups 0.270536 4 0.067634 0.396415 0.808804 2.866081
Within Groups 3.41228 20 0.170614

Total 3.682816 24

INTERPRETATION:

As P- Value is more than 0.05 we can conclude that there is no significant difference between Sharpe Ratio
of Selected Equity Mutual Funds

“Comparative Analysis of Top Large Cap Equity Mutual Funds in India”

 Table no 5
TREYNOR RATIO

Year Edelweiss HDFC ICICI Kotak Mahnidra Nippon India

2018-19 -0.61 0.25 0.06 0.06 0.15
2019-20 3.11 -0.95 -0.87 -0.48 -1.02
2020-21 18.3 1.68 1.94 1.51 1.77
2021-22 3.73 0.32 0.40 0.29 0.42
2022-23 -1.79 -0.05 -0.13 -0.17 -0.05
Source: (Amfiindia, ZCYC, Yahoo Finance)

TREYNOR RATIO
19.00
17.00
15.00
13.00
11.00
9.00
7.00
5.00
3.00
1.00
-1.00 2018-19 2019-20 2020-21 2021-22 2022-23
-3.00

Edelweiss HDFC ICICI Kotak Mahnidra Nippon India

(Graph no 5)

INTERPRETATION:

Edelweiss Mutual Funds average performance is around 18.3 which is highest followed by ICICI Mutual
FUnds. The least performer in the terms of Treynor Ratio among the selected Mutual Funds is of HDFC
and Kotak Mutual Funds.

Anova: Single Factor

SUMMARY
Groups Count Sum Average Variance
Edelweiss 5 22.74 4.548 64.65742
HDFC 5 1.25 0.25 0.89495
ICICI 5 1.4 0.28 1.07725
Kotak 5 1.21 0.242 0.58357
Nippon 5 1.27 0.254 1.01303

“Comparative Analysis of Top Large Cap Equity Mutual Funds in India”

 ANOVA
Source of Variation SS df MS F P-value F crit
Between Groups 73.67194 4 18.41799 1.349773 0.286461 2.866081
Within Groups 272.9049 20 13.64524

Total 346.5768 24

INTERPRETATION:

As P- Value is more than 0.05 we can conclude that there is significant difference between Treynor Ratio
of Selected Equity Mutual Funds.

Table no 6
JENSLON ALPHA

Year Edelweiss HDFC ICICI Kotak Mahnidra Nippon India

2018-19 -0.03 0.06 0.01 0.01 0.04
2019-20 -0.25 -0.22 -0.19 -0.08 -0.23
2020-21 0.71 0.47 0.51 0.35 0.48
2021-22 0.14 0.08 0.09 0.07 0.1
2022-23 -0.07 -0.02 -0.11 -0.04 -0.02
Source: (Amfiindia, ZCYC, Yahoo Finance)

JENSLON ALPHA
0.80
0.70
0.60
0.50
0.40
0.30
0.20
0.10
0.00
-0.10 2018-19 2019-20 2020-21 2021-22 2022-23
-0.20
-0.30

Edelweiss HDFC ICICI Kotak Mahnidra Nippon India

(Graph no 5)

“Comparative Analysis of Top Large Cap Equity Mutual Funds in India”

 Anova: Single Factor

SUMMARY
Groups Count Sum Average Variance
Edelweiss 5 0.5 0.1 0.1355
HDFC 5 0.5 0.1 0.1355
ICICI 5 0.31 0.062 0.07432
Kotak 5 0.31 0.062 0.02907
Nippon 5 0.37 0.074 0.06698
ANOVA
Source of Variation SS df MS F P-value F crit
Between Groups 0.007416 4 0.001854 0.021003 0.999061 2.866081
Within Groups 1.76548 20 0.088274

Total 1.772896 24

INTERPRETATION:

As P- Value is more than 0.05 we can conclude that there is no significant difference between Jenslon
Alpha of Selected Equity Mutual Funds

CONCLUSION

Analysing the performance of large-cap equity mutual funds necessitates a thorough examination of
numerous elements.

Historical performance of large-cap equities mutual funds can be used to gauge their capacity to produce
consistent returns over time. The study may disclose the funds' performance in comparison to key
benchmarks such as the S&P 500 or the Nifty 50, as well as peer funds in the same category.

Analysing risk-adjusted returns provides a more in-depth knowledge of how large-cap equities mutual
funds performed in relation to the level of risk they took. Sharpe ratios, Treynor ratios, and Jenslon Aplha
ratios can assist determine whether a fund has produced higher returns while accounting for volatility or
downside risk.

Edelweiss scheme has shown a remarkable return of 80% in the year 2020-21. ICICI Equity Saving fund
also has shown a return around 77% in the same year. In 2022-23 this scheme gives less return.

“Comparative Analysis of Top Large Cap Equity Mutual Funds in India”

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“Comparative Analysis of Top Large Cap Equity Mutual Funds in India”