Journal
| Title | Investment Styles and Performance of Liquid Mutual Funds in India | |
| Author's Name | S. Aravanan and M. Selva Kumari | |
| ISSN | 0974-7281 | |
| Page(s) | 33-54 | |
| Volume No. | 3 | |
| Issue Month | January 2011 | |
| Keywords | Liquid Fund, Growth Plans ,Dividend Plans, Institutional Plans | |
| Abstract | As the investors would like to park the idle cash somewhere which can be Liquid Mutual Funds also, we have analyzed the financial performance of selected open-ended Liquid Mutual fund schemes for the period 1st April 2006 to 31st March 2010. Here, there are 56 open ended liquid mutual fund schemes with different investment styles. Among them we have selected 18 open ended liquid growth fund plans and 18 open ended liquid dividend fund plans. The study has been conducted to evaluate the performance of the selected funds under the two chosen Plans on the basis of risk return relationship and to test whether the differences in the performance of the funds under the two Plans are statistically significant. The variables chosen for analyzing financial performance are Average Monthly Mean Return, Risk per unit return, Sharpe, Treynor and Jensen ratios. To add to this analysis, the student’s t-test (1-tailed test) has also been used. The study concludes by rejecting the null hypothesis and the alternative hypothesis is accepted: that the two investment plans, that is growth and dividend plans are not providing similar returns. Key Terms: 1. Liquid Fund: These funds invest in short term debt securities with high liquidity. In these types of funds, profitability plays second fiddle, while liquidity assumes priority. 2. Growth Plans: In this plan, the investor realizes only the capital appreciation on the investment (by an increase in NAV) and does not get any income in the form of dividend. 3. Dividend Plans: In this plan, income is distributed from time to time. This plan is ideal to those investors requiring regular income. 4. Institutional Plans: These plans are for non-individuals only. Minimum investment is Rs.1 crore. |
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