RISK AND RETURN ANALYSIS OF PUBLIC SECTOR MUTUAL FUND SCHEMES IN INDIA

Abstract

Investment is the sacrifice of certain present value for the uncertain future reward. Investment means an increase in the real stock of capital goods. Investment is important for an economy because it generates lots of positive effects for the economy. The risks are associated with the investment, tax benefits, liquidity, and marketability etc. Mutual funds provide a mechanism to invest in the stock market without knowing the complexities of stock market. Mutual funds provide the best option to the investors who have no knowledge of the stock market. Mutual fund is just the connecting bridge or a financial intermediary that allows a group of investors to pool their money together with a predetermined investment objective. They are responsible for investing the gathered money into specific securities (stocks or bonds). They invest their money on the behalf of investors. For this they charge only nominal fees. When tried toinvest in a mutual fund, the investor buying units or portions of the mutual fund and thus on investing becomes a shareholder or unit holder of the fund. Mutual funds provide more return with less risk. The main advantage of mutual fund is that it diversifies the risk because the pooled money is invested in diversified portfolio. The present study is analyzing the performance of public sector mutual fund schemes in terms of risk and return.