REVIEW OF LITERATURE Review of the literature plays an important role in any research, it is considering the importance of mutual fundsand several academicians have tried to study the performance of various mutual funds. Literature on mutual fund performance evaluation is enormous. Herewith some of the research studies that have influenced the preparation of this study substantially are discussed in this section. The Study “Analysis of Performance of Equity funds(Diversified) Open-end Mutual Fund during 1997 – 2000” was performed by M.Vijay Anand in IFMR ,Chennai (June 2000).The study focused on to understand the position of the schemes of birla sunlife and the competitors schemes available in the market. The study did Analysis of Performance of Equity fund for 3 years and SWOT Analysis of Birla Sunlife by Literature survey, Delphi technique, in depth financial review to identify among the selected equity funds that earns higher returns than benchmark and competitors and concluded that Birla Sunlife performs well compared to the benchmarks and competitors. The Research “Performance Evaluation of Franklin Templeton Mutual Funds” was done by R.Nithya in the IFMR Chennai (2004). The objective of the study is to analyse the performance of all the schemes available in the Franklin Templeton Mutual funds and Emphasize the values of mutual funds to the target people by identifying Asset Management Company that is performing well and identifying the top schemes in the category such as equity,balanced,Monthly Income Plan(MIP) & Income in the AMC. The AMC chosen was Franklin Templeton Mutual funds and it performed well and met the expectations. The Research “A study on Analysis of the performance of mutual fund with reference to HDFC” was done by Prasath.R.H in Anna University (2009) . The study is trying to emphasize the core values of mutual fund investment, benefits of mutual funds, types of mutual funds, etc., The study is going to conducted by taking the NAV values of different types of HDFC mutual fund EXCEL International Journal of Multidisciplinary Management Studies Vol.2 Issue 3, March 2012, ISSN 2249 8834 Online available at http://zenithresearch.org.in/ If the investor finds difficulty of getting Rp. and Beta parameters. The research “Characteristics and Performance Evaluation of Selected Mutual Funds in India” was done by Sharad Panwar and Dr.The research study concluded that out of 269 schemes. the investor should undergo fact sheet thoroughly and he has to choose the best one by calculating Sharpe Ratio. Jensen Ratio. Rf. The objective of the study is to identify differences in characteristics of public-sector sponsored & private-sector sponsored mutual funds and to find the extent of diversification in the portfolio of securities of public-sector sponsored and private-sector sponsored mutual funds and to compare the performance of public-sector sponsored and private-sector sponsored mutual funds using traditional investment measures. Treynor‟s Ratio. Madhumathi .return analysis.The study found that public-sector sponsored . The Study is conducted to understand whether most of the mutual fund schemes were able to satisfy investor‟s expectations by giving excess returns over expected returns . 102 were par performers and 118 were out performers of the market and Medium Term Debt Funds were the best .www.It was also concluded that 58 of 269 open ended mutual funds have provided better returns than the market during the bear period of September 98-April 2002. IR Ratio and NAV calculation.zenithresearch. The study concludes that before choosing the mutual fund scheme. Treynor‟s ratio. Some of the funds provided excess returns over expected returns based on both premium for systematic risk and total risk. R. market capitalization. NAV calculations are the best alternative to assess the performance. Standard deviation.in 96 products. The Research on “Performance Evaluation of Indian Mutual Funds” was done by Dr S Narayan Rao in IITB (2002) . . Jensen‟s measure. private-sector Indian sponsored and private-sector foreign sponsored mutual funds do not differ statistically in terms of portfolio characteristics such as net assets. and Fama‟s measure . risk.org. 49 were under performers. Sharp‟s measure. common stock%. Madras (2005). Sharpe‟s ratio. in IIT.The objective of this study was to evaluate the performance of Indian Mutual Fund Schemes during bear market through relative performance index (RPI). The research “Investors' Preference for Investment in Mutual Funds: An Empirical Evidence” is done by Jaspal Singh and Subhash Chander in the University Guru Nanak Dev University . and in the age group of 20-35. This study is actually a replication of the study conducted by Grinblatt & Titman and calculates PCM for a sample of 50 Indian mutual funds over a period of 26 months.zenithresearch. Top Ten %.in 97 belonging to the salaried category. with a view of validating their study in the Indian context.sector sponsored and Privatesector foreign sponsored mutual funds. Kaushik Bhattacharjee and Prof.holdings. years showed inclination towards close-ended growth (equity-oriented) schemes over the other scheme type.to Describe their size.org. To understand whether or not the selected mutual funds (hence forth called funds) are able to outperform the market on the average over the studied time period. For assessing the true performance of a particular mutual fund . Investors EXCEL International Journal of Multidisciplinary Management Studies Vol. The research “Fund Performance measurement without benchmark – A case of selected Indian Mutual funds” is complete by Mr.2 Issue 3. The research ”Measuring Performance of Indian Mutual Funds” was done by Deepak Agrawal in Truba College of Management & Technology . ISSN 2249 8834 Online available at http://zenithresearch. Hence. is indicated.in/ www. Punjab (2006). asset .The results show that the investors consider gold to be the most preferred form of investment. who still prefers to keep his savings in the form of yellow metal.The study concluded that there are positive signals of information asymmetry in the market with mutual fund managers having superior information about the returns of stocks as a whole. Portfolio risk characteristics measured through private-sector Indian sponsored mutual funds seems to have outperformed both Public. Bijan Roy in ICFAI University (2008). a longer time horizon is better. Indore (2007).org. followed by NSC and Post Office schemes. the basic psyche of an Indian investor. The objective of the study is to provide an overview of mutual fund activity in emerging markets . March 2012. for Indian equity mutual funds and to perform a return based style analysis of equity mutual funds in India and analyzed their relative performance with respect to style benchmarks. may be due to „sticky‟ returns of their component securities.Calcutta(2005) . to understand the impact of fund specific characteristics on performance .Goa (2003). S. The research “Performance of Indian Equity Mutual Funds . The research aims to do a style analysis using Sharpe‟s RBSA approach. V Murugaiah in Goa Institute of Management. The study concluded on the basis of overall analysis in can be inferred here that the additional return on sampled schemes and the market over risk free return was significantly low during the study period. The study reveled that the performance is affected saving and investment habits of the people at the second side the confidence and loyalty of the fund Manager and rewards affects the performance of the MF industry in India. The study aims to examine the degree of correlation that exists between fund and market return . This may indicate actual investment in those stocks. . The purpose of this study is to apply the measurement tools of modern portfolio theory to the performance of mutual funds .allocation . the fixed income asset classes have come out important components of their style exposures. Anand & Dr.Prof. The most important component of their style exposures are the mid cap stocks. The analysis shows that Indian equity mutual fund managers have not been able to beat their style benchmarks on the average. to analyze the Indian Mutual Fund Industry pricing mechanism with empirical studies on its valuation .Their Style Benchmarks– An Empirical Exploration” is done by Soumya Guha Deb. BB Chakrabarti in IIM. Prof. The study covers the period between April 1999 and March 2003 This indicates that the majority of schemes were showed underperformance in comparison with risk free return. Ashok Banerjee .to evaluate the diversification and selectivity skills of fund mangers . It also shows that although all the funds in our sample are equity funds. The Research “Analysis of Components of Investment Performance – An Empirical Study of Mutual Funds in India” was done by Dr. or in some other stocks that behaved like the mid cap index.to analyzes data at both the fund-manager and fund-investor levels . When residual variance (RV) is used as the measure of mutual fund portfolio diversification characteristic. However.The study also found that there is a statistical difference between sponsorship classes in terms of e SDAR(excess standard deviation adjusted returns)as a performance measure. This study also expected to help in the construction of funds ABSTRACT The study used sample of public-sector sponsored & private-sector sponsored mutual funds of varied net assets to investigate the differences in characteristics of assets held. RV . portfolio diversification. The present study seeks to fill this gap.2005. average variance and average coefficient of variation(COV). The objective of the research is to construct the portfolio using uses the cluster method. and variable effects of diversification on investment performance for the period May. there is a significant difference between public-sector sponsored mutual funds and private-sector sponsored mutual funds in terms of average standard deviation. Navdeep Agarwal in ICFAI University (2009) There is very little research on the construction of mutual fund portfolio. there is a statistical difference between publicsector sponsored mutual funds and private-sector sponsored mutual funds for the study period. taking industry concentration as a variable and to compare the performance of two types of portfolios with selected benchmarks.however.The research “Mutual Fund Portfolio Creation Using Industry Concentration” is done by Mohit Gupta . The model built on testing the impact of diversification on fund performance and found a statistical difference among sponsorship classes when residual variance is used as a measure of portfolio diversification and excess standard deviation adjusted returns as a performance measure. 2002 to May. The study found that public-sector sponsored funds do not differ significantly from private-sector sponsored funds in terms of mean returns%. has a direct impact on . as far as risk mitigation is concerned. selected according to the prevalent modes of mutual fund purchase Results are found to be encouraging. residual variance. fund return . Keywords: Mutual Funds. Net asset value.Sharpe fund performance measure. performance evaluation. risk-return analysis.