A Study of Trend in Asset Allocation among Public and Private Sector Sponsored Mutual Funds in India and its Impact on Performance of Open-Ended Equity Funds

Abstract

Indian Mutual Funds industry has an existence over 5 decades in the Indian markets, with US-64 scheme of Unit Trust of India (UTI) during 1964-87 as an introduction to the Indian investor to the concept of mutual fund. This industry has ever since, seen tremendous changes till date; with the entry of public sector bank sponsored mutual funds during 1987-1993 and private sector joining then after. The MF industry had shown a remarkable growth with the existence of both public sector and private sector players, post-liberalization. Among all others, one of the mutual fund peculiarities is the fund manager’s ability of asset allocation which reflects the fund manager’s inclination for positive returns from the sectoral performance which shall directly affect the returns generated by the funds. This paper attempts to study the impact of asset allocation on the performance of the open-ended equity funds of AMC’s under study.