Performance Appraisal of Overseas Fund of Funds Operating in India

S Poornima; R. K Sudhamathi

doi:10.26703/jct.v7i2.299

Authors

Dr. S. Poornima Associate Professor, Department of Business Management, PSGR Krishnammal College for Women, Coimbatore
R. K. Sudhamathi Research Scholar, Department of Business Management, PSGR Krishnammal College for Women, Coimbatore

DOI:

https://doi.org/10.26703/jct.v7i2.299

Keywords:

Overseas Fund of Funds, Risk Adjusted Performance Measure, Net Asset Value, NAV, CNX, Nifty Fifty

Abstract

Mutual fund industry has given a wide array of investment products to the investors. Overseas fund of funds is one such an investment product which provides greater diversification opportunity to the investors. There are 23 numbers of overseas mutual fund operating in India, out of which 9 were selected for the study. Criteria for the selection of funds for the study are the fund should be in existence at least for 3 years. Investment performance, risk and stock selection ability of the overseas fund of funds mutual fund managers were analyzed. The empirical results indicated success of many schemes selected. Out of 9 overseas funds selected for the study, 3 funds namely ING Global real estate fund- Institutional, ING Gloal real estate fund- Retail, ING Latin America equity fund are excellent when compared to market (S&P CNX Nifty). Risk adjusted performance measure based on Sharpe and Treynor shows that ING Global real estate fund- Institutional, ING Gloal real estate fund- Retail and DWS Global Thematic off-Shore fund are the best performers. Risk analysis based on beta value of overseas fund of funds indicates that all the funds are less risky than the market. The analysis also reveals that ING Global real estate fund- Institutional, ING Global real estate fund- Retail and DWS Global Thematic Off Shore fund reports superior stock selection ability among all other funds. And also none of the funds have reported negative performance when compared to risk-free rate to return.

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References

Himanush Puri (December 2010) “Performance Evaluation of Balanced Mutual Fund Schemes in Indian Scenario”, Paradigm, Vol.XIV, No.2, July- December, 2010, pp. 20-28.

Kannan,V. (2007) “Analysis of the Performance of Selected Private Mutual Fund Schemes in India”, Ph.D Thesis, Bharathiar University, Coimbatore

Kevin, S. (2011) Security Analysis and Portfolio Management, Delhi, PHI Learning Private Limited.

Khatri, D. K. (2006) Investment management and security analysis, Chennai,Macmillan India Ltd.

Sharpe and Treynor risk adjusted performance measure is used to analyse the investment performance of the fund.

Investment performance of the funds are also compared with the market index namely S&P CNX Nifty inorder to understand about the overseas fund of funds return against Indian Stock market.

Standard deviation and beta calculations are done to understand the risk involved in the overseas fund of fund mutual fund schemes.

Co-efficient of variation is used to measure the relative dispersion of the overseas fund of fund among other funds.

Jensen performance measure is used to understand the stock selection ability of overseas fund of funds mutual fund manager’s.