Performance of Tax Saving Mutual Fund Schemes: A Case Study of Selectedasset Management Companies Operating in India

Abstract

The financial system of a nation plays a critical and pivotal role in its economic development and growth. The Government of India launched the Equity Linked Savings Scheme (ELSS) in 1992 to promote investment culture. Equity mutual funds, also known as tax-saving mutual funds, are a popular way for small investors to pool their risk resources. Investments in the program are tax-deductible. As a result, this research has been settled upon to meet the investors’ objectives. The study aims to examine the success of ten Asset Management Companies (AMCs) tax-saving schemes over ten years, from 2011-12 to 2019-20. ELSS funds’ Net Asset Values (NAVs) are compared to a benchmark measure. Statistical tools such as expected return, standard deviation, beta, and the Treynor, Sharpe, and Jensen risk-adjusted-performance processes are utilized. According to the study, some mutual fund strategies outperformed their market returns, while others underperformed and delivered poor results. By using Sharpe, Treynor, Jensen, and Eugene Fama performance measures to compare relative performance among tax-saving mutual funds, it is clear that the private sector has outperformed the public sector in the mutual fund industry. From comparing different correlation analysis of Performance Measures using SPSS software, it is observed that kandellstau_b gives a better correlation coefficient value compared to spearman ranked order correlation.