Do Equity Mutual Fund Managers Possess efficient Stock Selection Skills?
Ravindra Sontakke1, Anand Muley2, Jaspal Gidwani3
1Dr. Ravindra N. Sontakke, Associate Professor, Department of Commerce, N.K.S Model College, Karanja(Gh), Dist. Wardha (M.S) Dr.
2Anand Ashok Muley, Assistant Professor, Department of Commerce,M Patel College of Arts, Commerce & Science, Bhandara.
3Dr. Jaspal Gidwani, Head of Department, Department of Management studies, R.T.M. Nagpur University, Nagpur
Manuscript received on February 28, 2020. | Revised Manuscript received on March 22, 2020. | Manuscript published on March 30, 2020. | PP: 5773-5780 | Volume-8 Issue-6, March 2020. | Retrieval Number: F1214038620/2020©BEIESP | DOI: 10.35940/ijrte.F1214.038620
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© The Authors. Blue Eyes Intelligence Engineering and Sciences Publication (BEIESP). This is an open access article under the CC BY-NC-ND license (http://creativecommons.org/licenses/by-nc-nd/4.0/)
Abstract: With a primary and single intent, Investors wants to take a position his hard earning money in such investment product which generate higher returns to him . Bunch of Investment options are there for Today’s Investors in this financial world, starting from Equity Stock investments to Gold, from property to Fixed Deposit and From Mutual Funds to Investments in Commodities. Supported risk craving & return desire, Investors can select from these investment avenues. Lagging in knowledge, experience & resources for directly accessing the capital market, also investors generally don’t have adequate time, they need to depend upon a mediator, which undertakes informed investment decisions & provides substantial benefits of professional proficiency. Therefore investment firm has been came with this plus point for such kind of investors through which they’ll have also access to capital market indirectly. A mutual fund is that the best suited investment for the ordinary saver because it proposes a chance to take a position in a diversified, professionally managed hamper of securities at a moderately squat price.Usually, the main focus in evaluating the performance of a mutual fund has been on fund manager’s skill available in stock selection. This paper is a pragmatic measurement of the performance of mutual fund managers in terms of “Stock selectivity”, within the structure suggested by Eugene Fama (1972). The study examines the performance of 34 Equity Linked Saving Schemes. The reference period for the study is January 2015 to December 2019. Stock selection is that the nub within the investment administration & management process. It involves identifying and selecting undervalued securities which among other things requires the successful forecasting of the corporate specific events or a capability to predict the final behavior of security prices within the future. If the fund manager is in a position to spot and choose the undervalued securities for the portfolio, then it’ll be possible for the fund manager to extend the returns of the schemes and vice versa. In practice fund managers are expected to produce advanced returns for unit holders Constantly as being professionals therefore possess superior skills to gather and analyze the information with the aim to pick the correct style of securities for the portfolio. In this research document stock selectivity skills of fund managers of Equity Linked Savings Scheme were dissected by using Jensen’s Alpha and Fama’s net selectivity measure. The upshot of the study reveal that bulk of the schemes has shown assenting alpha and most of the fund managers possess finer selectivity skills.
Keywords: Mutual Funds, Equity Linked Saving Schemes, Investment, Returns, stock selection.
Scope of the Article: Data Management.