Uti Rbp
UTI RETIRED BENEFIT PENSION FUND PERFORMANCE EVALUATION: AN EMPERICAL INVESTIGATION
ABSTRACT
This paper evaluates the performance of actively managed UTI Retired Benefit Pension fund against passively managed CNX 100 index as the benchmark index for the period
January 2008 to December 2012 by employing traditional measures of performance evaluation. This is broadly divided into two categories: stock selectivity and market timing ability. The former is evaluated by employing measures like Sharpe’s Ratio and Treynor’s Ratio and the latter by Jenson’s Alpha. The objective of the paper is to find out whether the UTI RBP has been successful in outperforming the chosen benchmark index. Some results show some over/under-performance, but it is also subject to certain limitations. Once these caveats are taken into account in calculating the risk-adjusted returns, the results may be altered.
INTRODUCTION
Financial Intermediation help in channeling of funds from suppliers to fund users. Thus it enables efficient allocation of resources leading to overall macroeconomic development.
Mutual Funds are second largest financial institutions after commercial banks .They have evolved over years as one of the most important financial institutions in the financial sector.
“Mutual Funds embody the American Ideal, whereby individual is treated to the privileges of the elite” (Don Phillips, in Morningstar Mutual Funds, 1992)
It is a non-depository financial intermediary that allows investors and households to pool money together with a predetermined investment goal. Money that is pooled is thus invested in a diversified and well managed portfolio at a low cost. Mutual Funds are suitable for investments in equity shares, bonds, real estate, derivatives and fixed income instruments. Unit holders receive the income
ABSTRACT
This paper evaluates the performance of actively managed UTI Retired Benefit Pension fund against passively managed CNX 100 index as the benchmark index for the period
January 2008 to December 2012 by employing traditional measures of performance evaluation. This is broadly divided into two categories: stock selectivity and market timing ability. The former is evaluated by employing measures like Sharpe’s Ratio and Treynor’s Ratio and the latter by Jenson’s Alpha. The objective of the paper is to find out whether the UTI RBP has been successful in outperforming the chosen benchmark index. Some results show some over/under-performance, but it is also subject to certain limitations. Once these caveats are taken into account in calculating the risk-adjusted returns, the results may be altered.
INTRODUCTION
Financial Intermediation help in channeling of funds from suppliers to fund users. Thus it enables efficient allocation of resources leading to overall macroeconomic development.
Mutual Funds are second largest financial institutions after commercial banks .They have evolved over years as one of the most important financial institutions in the financial sector.
“Mutual Funds embody the American Ideal, whereby individual is treated to the privileges of the elite” (Don Phillips, in Morningstar Mutual Funds, 1992)
It is a non-depository financial intermediary that allows investors and households to pool money together with a predetermined investment goal. Money that is pooled is thus invested in a diversified and well managed portfolio at a low cost. Mutual Funds are suitable for investments in equity shares, bonds, real estate, derivatives and fixed income instruments. Unit holders receive the income
References: * Admati, A., Bhattacharya,S., Pfleiderer,P., and Ross,S., (1986). “On Timing and Selectivity”, Journal of Finance, Vol. 41, Iss 3,p.p 715-730 * Fama E.F * Hair J.F., Anderson, R.E., Tatham, R.L., and Black, W.C.,(1998). Multivariate Data Analysis 5th, Prentice Hall, New Jersey * Knight, J * McCulloch, B.,(2003). “Geometric Return and Portfolio Analysis”. New Zealand Treasury Working Paper 03/28, Dec ., p.p 1-11 * Modigliani, Franco and Leah Modigliani * Sharpe, W.F. (1966), “Mutual Fund Performance”, Journal of Business, Vol. 39 pp119-138 * Sharpe, W * Simons, K., (1998). “Risk –Adjustment Performance of Mutual Funds”. New England Economic Review, Sep/Oct, P.p 33-48 * Treynor, J.L.(1965), “How to Rate management of investment Funds”, Harvard Business Review Vol 43 pp389-416 * Ward, C.W.R, and Saunders A., (1976). “UK Unit Trust Performance 1964-74”Journal of Business Finance and Accounting”, Vol 3, Issue 4, pg 83-100.