Mutual Funds Unveiled: A Performance Review and Comparative Analysis

Abstract

This study comprehensively evaluates the performance of ten selected large-cap mutual funds in India. Large-cap funds are known for investing in well-established, high-market-capitalization companies, offering investors a balance of risk and stability. This research aims to analyze these funds' absolute and risk-adjusted returns, compare them against benchmark indices such as NIFTY 100 and BSE 100, and assess the impact of expense ratios on net returns by considering the last five years' performance.

Using a dataset spanning five years from 2019 to 2024, the study employs critical performance metrics, including the Sharpe Ratio, Standard Deviation, Beta, and Expense Ratio, to evaluate each fund's risk management and return generation effectiveness. The analysis reveals that while all funds provided positive returns, significant disparities existed in their risk-adjusted performance. ICICI Prudential Bluechip Fund seems to be the best option overall because of its low expenses, moderate risk, and impressive risk-adjusted returns. The most minor volatile fund is Franklin India Bluechip Fund, which is appropriate for cautious investors. Although Nippon India Large Cap Fund has a high return potential, its risk-adjusted efficiency is lower.

This comparative analysis provides valuable insights into large-cap mutual funds' investment strategies and portfolio characteristics, highlighting the importance of cost efficiency and risk management in achieving superior returns. The findings serve as a crucial guide for investors seeking to optimize their investment portfolios, offering practical recommendations based on fund performance and market conditions. The study concludes by discussing the implications for mutual fund investors and potential areas for future research in the context of evolving market dynamics.