Evaluation of Mutual Funds Performance

Name: Evaluation of Mutual Funds Performance (English version)
SKU: W24912

Pinku Paul

Product #:W24912

Supplier:Ivey

Discipline:Finance

Setting:India, 2019

Details:Exercise (PDF) • 6 pages • 2021-09-21

Subjects:

Risk management Strategy Finance and investing

Geography:

Asia India

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$9.71

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A recent MBA graduate from a premier business school in India successfully secured a position with a major investment firm. Shortly after starting his new job, he was asked by his supervisor to evaluate the performance of three mutual funds that he had invested in during his MBA studies: Edelweiss, LIC MF, and BNP Paribas. All three investments were large cap funds. After completing his evaluation, the MBA graduate was hoping to understand the performance of the three mutual funds and determine which was the best investment choice.

Learning Objectives

This exercise is suitable for investment management courses at the graduate level to explain the concept of portfolio evaluation for active and passive management of funds. The case provides students with an opportunity to understand the calculation, analysis, and interpretation of various portfolio performance evaluation measures using Microsoft Excel. Calculation details are provided in two accompanying Excel files, one for students and one for the instructor. After working through the exercise and assignment questions, students will be able to

evaluate fund performance using the Sharpe ratio;
evaluate fund performance using the Treynor ratio;
evaluate fund performance using Jensen’s measure (Jensen’s alpha); and
evaluate fund performance using the M-squared ratio.