"68 percent of Total Mutual Fund Schemes are not efficient" : Research Study

By: Indian Institute of Finanance
GREATER NOIDA, India - April 20, 2021 - PRLog -- A research study published in Finance India states that 68% of the total Mutual fund schemes are not efficient. According to the study "54 per cent of the growth schemes are found to be efficient and 46 per cent are not efficient. Similarly it is found that 58 per cent of the Dividend schemes are found to be efficient while 42 percent are found to be not efficient  and in total schemes, This indicates that only 32 per cent of the schemes are found to be efficient". The study is published the latest issue of  Finance India –The Quarterly Journal of Finance, Vol. XXXV No. 1, March 2021 issue titled "Performance Evaluation of Equity Mutual Funds : A Data Envelopment Analysis Approach" by Prof. Noor Basha Abdul, Professor, Acharya Nagarjuna University,  Guntur and K. Sarvani, Asst. Professor, Maris Stella College,  Vijayawada.

Mutual Funds are the financial institutions which play a crucial role in mobilizing savings and investing them in the capital market. This study attempts to indentify the efficiency of the selected mutual fund schemes within growth and income schemes and for all selected mutual fund schemes. The DEA technique helps to identify the efficient unit in a given set of identical or homogenous business units. It compares the observed outputs and inputs, identifies the relatively best practice units to define the efficient frontier and then measure the degree of inefficiency of the other units relative to the efficient frontier.

The study has used different attributes of mutual funds viz., total Risk and Expenses ratio as input and Asset Under Management and 10 year mean annual return as output variables. From the analysis, 54% of growth schemes are found efficient, 58% of Dividend schemes are found efficient. As a whole only 32% of the schemes are found efficient.

Finance India – Quarterly Journal of Finance of Indian Institute of Finance published since 1987 is ranked 4th best  amongst 21,000+ Journals-Indexed in SJIF Journals Rank by Scientific Journal Impact Factor (SJIF) with a high SJIF Impact Factor Value for 2019 as 7.262. Finance India is ranked at par with top international journals. Finance India, SCOPUS Indexed & UGC approved Journal.  It is a Two Tier Triple Blind Peer Review Journal of more than 400 pages. Its has an exalted Editorial Board of over 100 Experts from all over World including 6 Nobel Laureates headed by Prof. Dr. JD Agarwal, an eminent economist. It is indexed and abstracted by more than 35 agencies and over 100 Universities worldwide.


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