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Review of Pacific Basin Financial Markets and Policies

Vol. 8, No. 4 (2005) 659685
c World Scientific Publishing Co.


and Center for Pacific Basin Business, Economics and Finance Research

Does Mutual Fund Management in India Correspond

to its Investment Objective Classification?
Luis Ferruz Agudo
Department of Accounting and Finance
Faculty of Economics and Business Studies
University of Zaragoza, C/Gran Va, 2
Zaragoza, 50005, Spain
lferruz@unizar.es
Cristina Ortiz L
azaro
Department of Accounting and Finance
Faculty of Economics and Business Studies
University of Zaragoza, C/Gran Va, 2
Zaragoza, 50005, Spain
cortiz@unizar.es
The aim of this article is to investigate the mutual fund market in India and verify
whether or not the fund classication obtained from the name given to identify
them corresponds to that which would be obtained were prior management to be
taken into account. This industry has undergone spectacular growth in recent years,
making this study extremely interesting, not least because institutional control
could be less in times of expansion. The methodologies employed in the study are
factor analysis and cluster analysis. The former determines that risk would clearly
identify two groups of funds in the same manner as public classication of the funds.
Cluster analysis, on the other hand, identies funds that are, in fact, very close to
one another, when for the bulk of investors they are not.
Keywords: Indian mutual funds; factor analysis; cluster analysis.

1. Introduction
The Asian nancial markets, considered to be emerging markets, are undergoing impressive growth and spectacular progress, making them the focus
of both professional and academic interests.

Corresponding author.
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This increasing trading atmosphere could have led, both management

companies and public regulations, to a misspecication of the denomination
given to each mutual fund. The name given to the buyers could not always
properly represent the style management of the fund.
The aim of this study is to conduct research into the evolution of the
mutual fund market in India in the last few years and to use the net asset
value (NAV) of the funds of the years 2001 and 2002 to infer some kind of
pattern that could help us classify them, thereby verifying to what extent
they coincide with the existing ocial classications.
Most of the times, non-specialized investors base their decision of purchase on this public information before trusting their assets to professional
management within the eld of mutual funds and it may, therefore, inuence
the nal decision to invest.
By the empirical analysis presented in this work, evidence is found of certain inconsistencies between the investment-objective classication and the
return obtained by the fund when cluster analysis is applied. Groups established by this statistical technique dier from the classication presented by
the Indian nancial authorities.
At the same time, more satisfying results for public regulators of the
Indian mutual fund market are found with a factor analysis, which distinguishes two main factors. The interpretation of one of these factors clearly
points to the level of risk of the fund.

2. Historical Review of Indian Mutual Fund Industry

The mutual fund industry in India has its origins in the Parliament Act 52 of
1963, which had as its objective the creation of an instrument for channeling
investment. An asset management company (AMC) was proposed to this
end the Unit Trust of India (UTI). This was nally created in February
1964 and the rst fund was called Unit Scheme 1964, popularly known as
US 64. Despite the fact that, according to its promoters, this fund was open
to all types of investor, the rst step towards a mutual fund market was
subject to many restrictions, as it fell under the administrative control and
regulations of the Reserve Bank of India. This tie was eventually broken in
1978, when the Industrial Development Bank of India took control.
It is important to understand this public initiative by the Indian government within the context of great political and economic uncertainty. Faced
by war in neighboring countries and an economic upheaval which would lead
to a crisis in the nancial markets, investors were not prepared to risk their

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Mutual Fund Management in India 661

money on either business initiatives or nancial investments. It is for this

reason that it became necessary to establish a system for channeling savings,
a measure that also served to slow down the countrys growth.
The year 1987 witnessed the beginning of a second phase. The existing
monopoly of the UTI came to an end and other types of companies, also public, entered the market. These were fundamentally the public sector banks
and two insurance companies Life Insurance Corporation of India (LIC)
on June 19th, 1989 and General Insurance Corporation of India (GIC) in
December 1990. The rst of the public banks was the State Bank of India
with its management company SBI Mutual Fund in June 1987, followed
by Canbank Mutual Fund in December 1987, Punjab National Bank Mutual
Fund in August 1989, and three more public banks. By 1993, a market had
emerged with nine AMCs managing a total of Rs. 47,004 crores, equivalent
to over 470,000 million rupees, almost 15,000 million dollars.
The turning point in the Indian mutual fund industry took place in
1993 when private sector entered the asset management business, providing
investors with a wider range of choice and warning existing mutual funds in
the form of an increased level of competition. Another crucial development
in this same year was the establishment of the rst Mutual Fund Regulations
for the government of all mutual funds with the exception of UTI. In 1992,
the Securities and Exchange Board of India (SEBI) Act was approved. The
aforementioned board was to seek maximum protection for investors interests and regulate the nancial markets. As we have already pointed out, its
rst action was taken in 1993 when it permitted the entry of private AMCs
into the mutual fund market.
The rst national private asset management company to make headway
in the mutual fund industry was Kothari Pioneer in July 1993, soon to
be joined by other international management companies, such as Morgan
Stanley, Jardine Fleming and JP Morgan, who saw in India an emerging
market where techniques have already been employed in other countries.
At a later date, an in-depth review of the regulations led to a new set of
regulations known as SEBI (Mutual Fund) Regulations 1996. Despite this
development, however, circulars are still emitted periodically to protect the
interests of investors.
Since that time, the growth in the number of new mutual funds and managers has not ceased and there have been various mergers and acquisitions
that continually modify the map of the mutual fund industry.
This increase in numbers rocketed in 1999 once the industry had
overcome the crisis suered between 1994 and 1996. A further key to this

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expansion were the modications in annual budgets (Union Budget), specifically, the introduction of tax exemption for dividends received by both the
private mutual fund investor and the fund itself, if over 50% was invested
in equities. Further reasons were consolidation of the structure of mutual
funds through various important mergers, the transformation of closed-end
funds into open-end funds and the amplication of the range on oer (for
example, the creation of many sector funds) and in addition to the above,
the reduction in the number of alternatives providing safe and rewarding
xed returns.
At this time, there was a tendency towards the expansion of funds under
foreign AMC compared to a decline in AMCs oated by national banks and
private sector Indian companies. One reason for this is that many banks
started out in the mutual fund business without adequate level of professional expertise and after years of markets in expansion were not capable
of assuming other scenarios, especially when considering the fact that these
mutual funds were oering guaranteed returns.
At the end of January 2003, therefore, there were 33 AMC controlling a
total of Rs. 121,805 crores, over 25,000 million dollars. More recently, there
has been an important change in the form of the abolition of the UTI Act
de 1963, splitting this company into two UTI I and UTI II. The latter
compromises accumulation funds and the former the classic US 64 and other
programs with assured returns.
At the time of its creation, UTI I, or Specied Undertaking of the Unit
Trust of India, managed assets worth Rs. 29,835 crores, around 6,000 million
dollars. It was not bound by mutual fund regulations and continued under
the control of the Indian government. On the other hand, UTI II, or UTI
Mutual Fund Ltd. managed Rs. 15,000 crores, over 3,000 million dollars,
and complied with the regulations in force, but still under the watchful
eye of the government, as the sponsors of its Asset Management Company,
LIC, Bank of Baroda, Punjab National Bank and State Bank of India, are
all public sector entities. Despite this, it would seem that the mutual fund
industry in India is moving towards complete liberalization of the sector
and is entering a new stage of growth and consolidation with equity of
Rs. 157,747 crores, a gure which exceeds 34,000 million dollars, with 28
AMC, and 399 mutual funds at the end of July 2004.
In order to better appreciate how the mutual fund market in India has
evolved, Table 1 displays the progress of assets under management of mutual
funds in recent years.

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Table 1. Evolution of assets under management according to the nature
of the AMC.
The table below presents the market share of the assets under management
in the Indian mutual fund market of each type of asset management company from September 1998 to March 2002 according to the data and the
categories provided by AMFI (Association of Mutual Funds in India).
Nature of the AMC
Date
Sep-98
Dec-98
Mar-99
Jun-99
Jul-99
Aug-99
Sep-99
Oct-99
Nov-99
Dec-99
Jan-00
Feb-00
Mar-00
Apr-00
May-00
Jun-00
Jul-00
Aug-00
Sep-00
Oct-00
Nov-00
Dec-00
Jan-01
Feb-01
Mar-01
Apr-01
May-01
Jun-01
Jul-01
Aug-01
Sep-01
Oct-01
Nov-01
Dec-01
Jan-02
Feb-02
Mar-02

UTI

Banks

Institutions

Private

83.58%
82.55%
77.87%
78.41%
76.13%
73.73%
73.83%
73.92%
7l.36%
69.27%
66.11%
64.54%
67.74%
68.33%
67.17%
67.59%
67.13%
65.33%
66.20%
64.75%
65.28%
64.67%
63.40%
62.72%
64.05%
62.60%
59.59%
57.09%
54.80%
53.41%
53.60%
52.90%
51.75%
50.27%
49.13%
48.63%
51.13%

6.69%
6.85%
8.00%
5.97%
7.04%
7.42%
7.18%
6.97%
6.97%
7.51%
7.92%
7.83%
6.94%
6.07%
5.76%
5.88%
6.02%
6.20%
3.92%
4.37%
3.70%
3.56%
3.72%
3.68%
3.68%
3.55%
3.66%
3.66%
3.59%
3.65%
3.78%
3.80%
3.95%
3.85%
3.91%
3.92%
3.95%

2.82%
3.03%
4.11%
3.43%
3.64%
3.36%
3.15%
2.99%
3.11%
3.09%
3.13%
3.26%
3.16%
3.10%
2.96%
2.98%
2.90%
2.93%
2.99%
3.56%
3.48%
3.54%
3.59%
3.65%
3.87%
3.79%
3.85%
4.12%
4.17%
4.27%
4.46%
4.34%
4.38%
4.38%
4.51%
4.58%
4.21%

6.90%
7.58%
10.02%
12.18%
13.18%
15.49%
15.84%
16.12%
18.56%
20.13%
22.84%
24.37%
22.16%
22.50%
24.11%
23.54%
23.95%
25.54%
26.89%
27.32%
27.54%
28.23%
29.29%
29.94%
28.40%
30.06%
32.89%
35.13%
37.43%
38.67%
38.16%
38.96%
39.93%
41.50%
42.45%
42.87%
40.71%

Source: Own calculations based on AMFI data.

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This table conrms the trends outlined above. On one hand, there is
the spectacular increase in assets in 1999, and on the other, private AMCs
increase sharply in both assets and percentage of the total, in detriment to,
mainly, the pioneering UTI and part of the assets managed by banks. We
should also mention the global crisis of 2000 and 2001, which aected the
western markets as well.
Before we broach the empirical study, however, it would also be useful to
consider the type of funds that exist in the country and their classication.
Using the evolution of the mutual fund market as a reference we can classify asset management companies according to their nature, which may be:
Public institutions, as was the case with the Unit Trust of India before
its separation or the GIC, commented above.
Companies sponsored by banks, for e.g., Canbank or the State Bank of
India.
Private sector, either national, such as Birla Sun Life or Credit Capital,
or international, such as Alliance or DSP Merrill Lynch.
Each of these AMCs comprises a range of mutual funds, which can be
classied, for instance, according to their investment objective:
Equity funds: Their objective is the capital appreciation in the
medium/long-term by investing in equities of the stock market.
Income funds: These type of funds are aimed at regular returns, although
generally less than the above due to their investment in xed returns.
Balanced funds: These are a combination of the above two and invest in
both xed income securities and equities, with a tendency to generally
distribute part of their prots. Evolution does not uctuate as much as
for the rest of the stock market.
Money Market funds: In this case, the objective is immediate liquidity,
reducing risk to the minimum and with moderate returns. These funds
invest in safer short-term instruments, such as treasury bills. In general,
this type of mutual fund tends to be used to make the most of excess
liquidity.
Another type of mutual funds deserving a special mention due to their
characteristics of beneting from a more advantageous tax position are the
Equity Linked Savings Schemes (ELSS), created by Section 88 of the 1961
Income Tax Act, whereby the government oered tax incentives to investors

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Mutual Fund Management in India 665

who deposited their money in these funds, although with investment limited
to Rs. 10,000 what means approximately $215.

3. References in the Financial Literature

The worldwide evolution of the mutual fund industry has given rise to
numerous articles regarding its progress, management and other variables
open to analysis. An example of this interest is an article by Klapper et al.
(2004), which conducts a descriptive study of the revolution in the nancial
investment market during the decade of the nineties. For the Asian case in
particular, an in-depth analysis of the attitude of investors in Taiwan can
be found in Shu et al. (2002).
Furthermore, there is great interest in Asian Stock Markets and therefore numerous articles have appeared regarding the Asian stocks markets
and the recent crises they have undergone. As far as we are aware, the
mutual fund market in India has received less attention in terms of studies. Nevertheless, there are some authors who have dedicated part of their
work to these nancial instruments, for e.g., Thomas (1999) and Waghmare
(1998) in their books on perspectives of the mutual fund market or Sehgal
(1998, 1999), who analyzes management performance and fund managers
selection skills.
In order to oer a view of the performance of the mutual funds in India,
the following box plot is presented.

4. Database and Methodology

In order to carry out this research, a database was designed using the daily
NAV of Indian mutual funds published by AMFI (Association of Mutual
Funds in India) throughout January 2001 and October 2002. In this way, we
obtain a database free from survival bias, due to the fact that daily NAV
include all the mutual funds negotiated on the market. Fund name changes
were considered in order to give continuity to the series.
These NAVs represent the cumulative market value of the assets of its
liabilities. They include the management fees, custody charges, etc., that are
calculated on a daily basis. The management fee is the amount a mutual fund
pays to its investment advisor for services rendered, including management
of the funds portfolio. This fee usually ranges form 0.5% to 1% of the funds
asset value. Besides, the investors in certain mutual funds should pay loads
when buying (front-end load) or selling (back-end load) shares of these load

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0.40

Returns

0.20

0.00

-0.20

-0.40
M.01 M.02 M.03 M.04 M.05 M.06 M.07 M.08 M.09 M.10 M.11 M.12 M.13 M.14 M.15 M.16 M.17 M.18 M.19 M.20 M.21 M.22

Months
Fig. 1.

Box plot of the mutual fund monthly returns and the reference index.

Each box of the box plot represents the monthly returns of the mutual funds. The median
of the data is represented by the line in the center of the rectangle box. The two ends of
the rectangle represent the upper quartile or Q3, and the lower quartile or Q1. The other
two values of the extremes show the maximum and minimum value of the data set. The
points and lines represent the returns of the index BSE200, reference of the Indian stock
index. In this case, outliers or extreme values have been hidden to simplifly the plot.

funds. This commission is generally stated as a portion of the funds oering

price, usually on a sliding from one to 8.5%.
The mutual funds can manage the assets according to dierent investment objectives aforementioned in the previous section, in the same way as
in an international context. In these investment strategies, Indian mutual
funds are not allowed to go short.
The initial database included a total of 476 mutual funds managed by
31 AMCs. Nevertheless, the instability of the market and continuous movement typical of a market in expansion such as this led to the continual
appearance and disappearance of numerous mutual funds. It was, therefore,
necessary to purify the database to make the statistical analyses to be
applied suciently robust. The nal database employed comprised a total
of 244 mutual funds distributed among 27 AMCs.
In this study, we employ the technique of factor analysis. This form of
statistical analysis is based on the study and interpretation of correlations

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Mutual Fund Management in India 667

between a group of variables and would be appropriate in the context of

highly correlated quantitative variables.
Considering p variables X1 , X2 , Xp , that are correlated; the set of random
variables, Xi , has to be expressed in terms of a smaller number of random
variables, which we call factors and denote by F1 , F2 , Fk (k p = number of
original variables). Xi , is explained by a linear combination of these factors,
Fk , which are accompanied by their factor loadings aik :
Xi = ai1 F1 + ai2 F2 + + aik Fk + i .

(4.1)

Each expression of a variable consists of two parts: a part due to the

common factors and a part due to the unique factor of the original variable
(i ) and also it is composed of its variance:
The communality, expressed by h2i that is, the part of the variance that
is due to the common factors.
The specicity, denoted by u2i , that is, the part of the variance that is
due to the unique factor i .
The main point this factor analysis is concerned with, is nding the
estimates of factor loadings and communalities. The method applied for
this purpose in the next section is the principal-components analysis. The
solution obtained is called the initial factor extraction, but sometimes the
results are not easily interpreted and, thus, obtaining new rotated factors is
required.
As far as the cluster analysis is concerned, it is another technique for
grouping dierent individuals or objects into unknown groups. In this study,
the aim is to categorize dierent groups of mutual funds in India according
to their NAVs.
This analysis has two versions a hierarchical cluster which uses
explanatory technique to determine the number of groups in the sample
and a non-hierarchical cluster which can conrm the conclusions from the
previous analysis given that it uses a specic number of pre-dened groups
as a starting point.
The application of the methods mentioned before require dening of
some measures of closeness or similarity between each pair of observations.
The most commonly distance employed and the one applied in the empirical
analysis is the Euclidian distance that is the square root of the sum of the
squared dierences between the coordinates of each variable for the two

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observations, with the following expression:


p
 n 

(xrj xsj )2
D=

(4.2)

j=1 r,s=1

where xij represents the NAV of each fund i on day j.

The hierarchical methods of the cluster analysis are usually agglomerative, statistical packages begin with the whole number of observations that
are combined in successive steps according to its closeness, thus reducing
the number of clusters.
5. Empirical Results
5.1. Factor analysis
Before applying the aforementioned techniques, we carry out an analysis
of correlations between the variables being studied. This obtains a high
percentage of signicant correlations at 1%, which leads us to focus on the
factor analysis.
The principal-components analysis is employed for estimating factors,
based on the assumption that common factors explain the behavior of all
original variables. For this, the initial communalities of each variable are
equal to 1, as the n variables are explained by n factors. Once we substitute
them for m factors, the nal communality of each variable (h2i ) tells us the
proportion of total variability explained by the m factors ultimately selected.
In our case, a high percentage of the nal communalities are above 0.90 and
always exceed 0.662, which again supports the idea of conducting a factor
analysis. Table 2 displays, as an example, some of these communalities.
By extracting factors, we arrive at the percentage variance contributed
by each one of the detected components. The most important components
and their percentages of total explained variance can be observed in Table 3.
According to the Kaiser criterion, factors with eigenvalues greater than
1 are retained. In this case, we obtain 13 factors (principal components).
Nevertheless, this criterion can be complemented with that of determining
the percentage variance which selects those factors that accumulate a percentage of variance above 70% or 75%. Given the aforementioned table, this
would mean the existence of two or three main factors capable of explaining
the movements of mutual fund NAVs in India. Above factor 35 over 99% of
accumulated variance is obtained and above 179 the gure is 100%.
A graphical method is the scree test, in which the criterion employed for
determining the number of factors is to select the number of components in

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Mutual Fund Management in India 669

Table 2. Initial and final communalities in a sample
of mutual funds.
This table shows some of the initial and final communalities of a sample of mutual funds as an example of
the whole study.
Name of the Fund

Initial

Final

ALLIANCE
ALLIANC1
ALLIANC2
ALLIANC3
ALLIANC4
ALLIANC6
ALLIANC7
ALLIANC8
ALLIAN10
ALLIAN11
ALLIAN12
ALLIAN13
ALLIAN14
ALLIAN15
ALLIAN16
ALLIAN17
ALLIAN18
ALLIAN19
ALLIAN21
ALLIAN22
ALLIAN23
ALLIAN24
ALLIAN25
BIRLA AD
BIRLA BA
BIRLA CA
BIRLA Cl
BIRLA GI
BIRLA G1
BIRLA G2
BIRLA G3
BIRLA G4
BIRLA G5
BIRLA IN
BIRLA IT
BIRLA I3
BIRLA MN
BIRLA M1
BIRLA Tl
CANBONUS
CANEXPO

1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
I
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1

0.979
0.994
0.991
0.959
0.992
0.786
0.993
0.994
0.977
0.972
0.955
0.965
0.933
0.999
0.931
0.999
0.92
0.949
0.936
0.9
0.779
0.989
0.989
0.994
0.989
0.976
0.983
0.95
0.985
0.93
0.996
0.943
0.997
0.945
0.99
0.982
0.913
0.986
0.886
0.996
0.995

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Table 3.

Factor analysis statistics.

First column represents the number of principal components

ranked by the eigenvalues. Second column shows the value of the
eigenvalues of each principal component. The third column is the
percentage of variance of this principal component and finally,
the fourth column is the cumulative proportion of variance for
the principal components.
Component

Eigenvalues

% Total Variance

Cumulative %

1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20

90.885
82.911
25.446
8.636
4.888
4.024
3.582
3.412
2.764
1.85
1.511
1.38
1.194
0.989
0.974
0.873
0.781
0.603
0.557
0.502

37.248
33.98
10.429
3.539
2.003
1.649
1.468
1.398
1.133
0.758
0.619
0.566
0.489
0.405
0.399
0.358
0.32
0.247
0.228
0.206

37.248
71.228
81.656
85.196
87.199
88.848
90.316
91.715
92.847
93.605
94.225
94.79
95.28
95.685
96.084
96.442
96.762
97.009
97.238
97.443

place before the turning point. According to the corresponding graph shown
below, there are three factors we can work with.
We have used the component matrix attached in Appendix 1 to attempt
to explain the factor loadings we nd there. Special attention is paid to
the rst three factors, as these are the ones with the highest percentage for
explaining variance. From this observation, we nd a very important characteristic in the second factor, i.e., variables (mutual funds) with a negative
factor loading belong to those classied as money market and income mutual
funds. Using the names of mutual funds on the Indian market gathered from
the evolution of their NAVs and other documents where these funds are classied according to their investment objective, we are able to state that our
sample of 244 mutual funds includes 33 that invest in instruments of maximum liquidity; 102 that invest in debt or xed return products; 87 that
invest in equities and 22 that combine all of the above in their portfolios.

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Mutual Fund Management in India 671

Fig. 2.

Scree test, plot of eigenvalues.

Vertical axes represent the value of the eigenvalues for each principal component of the
horizontal axes. The number of principal components to be studied are those placed before
the turning point.

Of the 118 negative coecients in the second factor, only 7% correspond

to mutual funds which are not classied as xed return, and these are very
low in terms of absolute values. These negative coecients cover over 80%
of the 135 funds investing in xed return and, with the exception of only
four cases, do not exceed 0.3.
These gures lead us to the conclusion that risk in investments made
by mutual funds in India is a factor to consider if we are to explain the
evolution of their return.
Deviations we have encountered could be due to the fact that funds with
mixed investments can go in one direction or another depending on the
percentages of investment; and also to the fact that some AMC may not
follow the investment objective established at the outset.
The component graph could be useful when determining the number of
groups that would be formed using this and other factors, as it provides us
with a three-dimensional picture with each variable according to the factor
loading of each component.
From observation of the scatterplot, we can deduce the existence of two
or three groups on the whole.

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672 Luis Ferruz Agudo & Cristina Ortiz L

azaro

1,5

Component 2

1,0
,5
0,0
-,5

1,5

1,0

,5

0,0

Component 1

Fig. 3.

-,5

,2
-,2 0,0

,8 1,0
,4 ,6

Component 3

Scatterplot of the factor loadings.

In this geometric representation, each mutual fund is classified according to the factorial
scores of each component.

As explained in the methodology section, sometimes it is necessary to

iterate the principal components to get better results interpretation. In order
to carrying out the iterated factor extraction, varimax and quartimax strategies have been employed in non-reported analysis. Results are very similar
and do not improve the clear existence of two main groups of funds.
This rst statistical technique applied to the dataset shows evidence of
a strong relationship between the classication of mutual funds according
to the investment objective and the results obtained by the fund. This relationship has as the main link the position towards risk of the fund.
5.2. Cluster analysis
In an attempt to conrm previous conclusions of the factor analysis, cluster analysis, explained in Sec. 4, is applied to the dataset of the Indian
mutual funds. First of all, we conducted an explanatory analysis based
on the hierarchical method, which groups variables in each iteration, so
that once two variables have formed a group they will not be separated for
the rest of the process. In the case we are concerned with, we can consider the Euclidean distance a similar measurement given that all variables are quantitative. This will serve as a criterion for classifying the
variables.
The statistical package used to carry out this analysis shows the dendogram corresponding to the cluster analysis.

November 14, 2005

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Mutual Fund Management in India 673

34

186

6
14
2

Fig. 4.

Dendogram for hierarchical cluster analysis of mutual funds in India.

The dendogram or tree graph summarizes the clustering at successive steps. The vertical
axis lists the total number of mutual funds in India in a particular order. The horizontal
axis shows the successive steps.

From Fig. 4, we can deduce that some variables are atypical, those which
appear at the end of the diagram. They seem to form two large groups.
Nevertheless, these groups are not clearly dened, although the former is
mainly comprised of funds which are classied as equity funds, the second
group is comprised of a large variety of mutual funds.
The results of the analysis of this statistical technique dier form those
of the factor analysis. The classication obtained with cluster analysis would
lead us to think that mutual funds do not really follow the strategies they
explain in their prospects.
6. Conclusions
From the available information and the results of the analysis we have conducted, we can draw several conclusions:
Risk is one of the variables that inuences the evolution of Indian mutual
fund NAVs. Classifying funds in accordance with the risk produces small
deviations with regard to the criteria of percentages in investment that allow

November 14, 2005

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the classication made by the institutions responsible for ensuring the correct functioning and investor security in the mutual fund market. We can nd
one explanation in the fact that this market is not suciently developed to
be able to sustain an institution that can eciently control the investments
made by dierent mutual funds. Alternatively, the predetermined criteria
are simply not followed.
In this market, we can also nd other inuential factors that would modify the basic classication encountered for mutual funds if we were to base
this on a dierent criterion.
This is an important previous work and a possible extension of this study
could be based on the increase in the number of variables taken into account
when making the classication. This means along with the daily mutual
funds net asset values, we can also take as a reference other data such as
commissions charged for each mutual fund, total assets under management,
the number of years a fund has been commercialized, or other related factors.
Another option which would meet the objectives of this study would be
to ascertain the composition of investment portfolios, thereby ascertaining
whether or not the established investment policy is actually being followed.
Acknowledgments
The authors would like to express their thanks to the Spanish Directorate
General for Higher Education for the award of Project PB97-1003, to the
Regional Government of Aragon for the award of Projects P06/97 and
268-124, to Ibercaja for the award of Project 268-96 and to the University of Zaragoza for the award of funding through Research Projects 268-77,
268-84, and 268-93.
Any possible errors contained in this paper are the exclusive responsibility of the authors.

00055.tex

ALLIANCE
ALLIANC1
ALLIANC2
ALLIANC3
ALLIANC4
ALLIANC6
ALLIANC7
ALLIANC8
ALLIAN10
ALLIAN11
ALLIAN12
ALLIAN13
ALLIAN14
ALLIAN15
ALLIAN16
ALLIAN17
ALLIAN18
ALLIAN19
ALLIAN21
ALLIAN22
ALLIAN23
ALLIAN24
ALLIAN25
BIRLA AD
BIRLA BA
BIRLA CA

0.275
0.854
0.979
0.759
0.865
0.246
0.254
0.649
0.191
0.151
0.237
0.02
0.095
0.716
0.092
0.716
0.376
0.682
0.644
0.351
0.212
0.47
0.474
0.706
0.662
0.65

1
0.919
0.492
0.041
0.535
0.473
0.261
0.946
0.746
0.152
0.133
0.201
0.058
0.144
0.696
0.142
0.696
0.134
0.289
0.004
0.13
0.21
0.864
0.862
0.695
0.717
0.541

2
0.19
0.084
0.056
0.053
0.028
0.025
0.133
0.071
0.147
0.02
0.012
0.007
0.778
0.007
0.779
0.007
0.289
0.131
0.475
0.616
0.046
0.015
0.015
0.016
0.113
0.434

3
0.043
0.039
0.046
0.023
0.08
0.711
0.062
0.019
0.574
0.61
0.545
0.636
0.252
0.023
0.252
0.023
0.205
0.121
0.407
0.371
0.632
0.062
0.059
0.066
0.117
0.102

4
0.012
0.031
0.117
0.048
0.034
0.266
0.031
0.033
0.451
0.447
0.475
0.423
0.22
0.004
0.217
0.005
0.476
0.353
0.042
0.043
0.385
0.008
0.007
0.015
0.05
0.185

7
0.007
0.041
0.043
0.151
0.04
0.039
0.011
0.023
0.283
0.291
0.188
0.364
0.024
0.022
0.021
0.022
0.27
0.207
0.288
0.38
0.177
0.04
0.04
0.055
0.07
0.036

6
0.099
0.057
9.27E-05
0.031
0.044
0.039
0.07
0.045
0.013
0.009
0.057
0.017
0.187
0.017
0.185
0.016
0.404
0.292
0.03
0.002
0.005
0.022
0.021
0.015
0.009
0.007

Component

Appendix

0.037
0.041
0.056
0.144
0.061
0.108
0.022
0.03
0.482
0.482
0.507
0.447
0.101
0.002
0.101
0.002
0.293
0.247
0.019
0.213
0.315
0.045
0.046
0.036
0.011
0.006

8
0.084
0.021
0.018
0.11
0.029
0.106
0.048
0.017
0.131
0.086
0.059
0.093
0.28
0.002
0.278
0.002
0.036
0.062
0.073
0.024
0.023
0.015
0.016
0.006
0.023
0.075

9
0.04
0.043
0.03
0.092
0.028
0.067
0.033
0.051
0.146
0.147
0.152
0.148
0.182
0.011
0.184
0.012
0.164
0.105
0.173
0.149
0.053
0.026
0.025
0.021
0.008
0.03

10
0.016
0.047
0.063
0.109
0.036
0.129
0.023
0.031
0.093
0.099
0.1
0.083
0.066
0.002
0.067
0.003
0.064
0.061
0.03
0.046
0.07
0.088
0.088
0.029
0.029
0.083

11
0.028
0.023
0.013
0.083
0.017
0.176
0.026
0.02
0.043
0.068
0.05
0.086
0.149
0.015
0.152
0.015
0.055
0.033
0.065
0.034
0.036
0.018
0.018
0.03
0.009
0.046

12

0.011
0.043
0.039
0.085
0.034
0.047
0.023
0.041
0.004
0.004
0.024
0.012
0.042
0.003
0.042
0.002
0.225
0.189
0.058
0.159
0.002
0.069
0.069
0.008
0.025
0.106

13

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Mutual Fund Management in India 675

BIRLA C1
BIRLA GI
BIRLA G1
BIRLA G2
BIRLA G3
BIRLA G4
BIRLA G5
BIRLA IN
BIRLA IT
BIRLA I3
BIRLA MN
BIRLA M1
BIRLA T1
CANBONUS
CANEXPO
CANGANGA
CANGLOBA
CANPREMI
CANTRIPL
TAURUS D
TAURUS L
TAURUS 2
TAURUS T
DSP ML B
DSP ML 1
DSP ML 2

0.427
0.629
0.349
0.047
0.781
0.369
0.733
0.502
0.93
0.918
0.174
0.937
0.899
0.398
0.276
0.641
0.233
0.545
0.929
0.223
0.338
0.613
0.573
0.468
0.712
0.017

3
0.063
0.6
0.154
0.846
0.026
0.843
0.086
0.428
0.059
0.075
0.331
0.003
0.021
0.121
0.08
0.156
0.09
0.161
0.179
0.164
0.033
0.028
0.153
0.048
0.127
0.351

2
0.871
0.077
0.855
0.311
0.603
0.112
0.668
0.548
0.28
0.295
0.78
0.238
0.259
0.898
0.946
0.726
0.962
0.429
0.282
0.908
0.907
0.691
0.747
0.504
0.634
0.06

0.055
0.014
0.115
0.014
0.047
0.005
0.051
0.386
0.133
0.096
0.207
0.124
0.049
0.01
0.082
0.127
0.038
0.144
0.067
0.203
0.108
0.175
0.141
0.284
0.024
0.016

4
0.089
0.063
0.007
0.161
0.059
0.072
0.039
0.1
0.001
0.032
0.123
0.047
0.017
0.018
0.012
0.007
0.02
0.044
0.012
0.037
0.094
0.074
0.025
0.2
0.119
0.33

5
0.001
0.26
0.149
0.035
0.066
0.213
0.011
0.092
0.042
0.052
0.012
0.055
0.002
0.067
0.043
0.028
0.035
0.197
0.02
0.037
0.056
0.113
0.051
0.009
0.188
0.648

7
0.153
0.09
0.081
0.051
0.009
0.022
0.002
0.087
0.088
0.128
0.066
0.002
0.02
0.074
0.025
0.017
0.008
0.065
0.025
0.105
0.132
0.148
0.176
0.103
0.024
0.117

Component
8
0.019
0.061
0.019
0.138
0.007
0.148
0.008
0.155
0.092
0.086
0.072
0.119
0.035
0.053
0.036
0.007
0.04
0.266
0.025
0.076
0.045
0.113
0.051
0.224
0.036
0.372

Appendix (Continued)

0.004
0.293
0.232
0.213
0.092
0.053
0.008
0.055
0.017
0.033
0.05
0.002
0.008
0.034
0.051
0.051
0.034
0.212
0.041
0.006
0.048
0.135
0.078
0.179
0.12
0.422

9
0.011
0.032
0.049
0.046
0.001
0.079
0.002
0.07
0.02
0.045
0.175
0.025
0.034
0.004
0.015
0.024
0.009
0.008
0.016
0.072
0.028
0.019
0.042
0.185
0.001
0.067

10
0.004
0.126
0.092
0.016
0.044
0.022
0.027
0.014
0.068
0.065
0.24
0.054
0.051
0.004
0.001
0.018
0.001
0.163
0
0.018
0.017
0.025
0.008
0.238
0.025
0.011

11
0.051
0.013
0.02
0.059
0.029
0.03
0.018
0.036
0.002
0.007
0.037
0.111
0.028
0.042
0.058
0.083
0.031
0.44
0.094
0.069
0.088
0.156
0.083
0.112
0.001
0.035

12

0.016
0.024
0.014
0.122
0.024
0.018
0.001
0.011
0.054
0.046
0.068
0.018
0.014
0.019
0.008
0.02
0.004
0.135
0.012
0.038
0.033
0.052
0.045
0.041
0.008
0.003

13

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00055.tex

DSP ML 3
DSP ML E
DSP ML G
DSP ML 4
DSP ML 5
DSP ML 6
DSP ML L
DSP ML 7
DSP ML O
DUNDEE B
DUNDEE 1
DUNDEE 2
DUNDEE 5
DUNDEE 7
DUNDEE P
DUNDEE10
DUNDEE11
DUNDEE S
DUNDEE14
DUNDEE15
DUNDEE16
DUNDEE T
ESCORTS8
ESCORTS9
ESCORT12
FIRST 17

0.636
0.349
0.04
0.738
0.155
0.648
0.012
0.664
0.777
0.95
0.233
0.639
0.355
0.875
0.79
0.642
0.448
0.464
0.508
0.592
0.656
0.948
0.628
0.695
0.846
0.492

3
0.01
0.142
0.841
0.083
0.618
0.022
0.065
0.095
0.063
0.085
0.572
0.008
0.398
0.064
0.143
0.235
0.515
0.746
0.708
0.725
0.125
0.107
0.137
0.051
0.009
0.117

2
0.613
0.91
0.063
0.658
0.037
0.743
0.005
0.641
0.502
0.19
0.484
0.756
0.128
0.373
0.188
0.265
0.557
0.075
0.081
0.079
0.728
0.146
0.571
0.631
0.449
0.849
0.039
0.039
0.141
0.034
0.077
0.018
0.103
0.07
0.029
0.118
0.346
0.051
0.112
0.063
0.11
0.322
0.028
0.227
0.375
0.193
0.107
0.159
0.224
0.01
0.187
0.014

4
0.141
0.065
0.232
0.002
0.189
0.002
0.314
0.117
0.072
0.029
0.255
0.005
0.199
0.019
0.324
0.476
0.221
0.156
0.087
0.054
0.064
0.033
0.01
0.015
0.12
0.03

5
0.337
0.089
0.359
0.082
0.65
0.046
0.718
0.258
0.25
0.01
0.149
0.065
0.152
0.174
0.017
0.001
0.057
0.19
0.207
0.205
0.03
0.014
0.014
0.026
0.008
0.015

7
0.096
0.04
0.073
0.018
0.037
0.066
0.178
0.098
0.129
0.102
0.208
0.002
0.008
0.075
0.012
0.085
0.286
0.17
0.003
0.034
0.01
0.09
0.039
0.023
0.015
0.073

Component
8
0.185
0.018
0.116
0.037
0.162
0.044
0.384
0.139
0.175
0.064
0.01
0.03
0.033
0.01
0.076
0.014
0.061
0.039
0.081
0.017
0.021
0.081
0.042
0.011
0.056
0.021

Appendix (Continued)

0.182
0.047
0.015
0.038
0.112
0.012
0.404
0.139
0.126
0.03
0.188
0.06
0.296
0.171
0.149
0.177
0.106
0.051
0.044
0.005
0.063
0.015
0.068
0.004
0.003
0.001

9
0.006
0.004
0.084
0.008
0.02
0.034
0.004
0.004
0.039
0.029
0.046
0.018
0.184
0.016
0.134
0.002
0.153
0.04
0.046
0.012
0.009
0.011
0.08
0.02
0.046
0.035

10
0.001
0.004
0.007
0.028
0.089
0.032
0.017
0.019
0.01
0.037
0.03
0.021
0.239
0.03
0.056
0.108
0.033
0.032
0.008
0.047
0.021
0.04
0.066
0.029
0.022
0.038

11
0.012
0.056
0.046
0.011
0.03
0.013
0.034
0.032
0.008
0.066
0.065
0.02
0.109
0.004
0.087
0.043
0.024
0.093
0.052
0.066
0.012
0.052
0.01
0.032
0.003
0.011

12

0.017
0.024
0.072
0.002
0.087
0.013
0.055
0.015
0.017
0.024
0.127
0.01
0.451
0.004
0.132
0.098
0.046
0.001
0.056
0.021
0.019
0.015
0.066
0.001
0.007
0.003

13

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Mutual Fund Management in India 677

GIC BALA
0.758
0.554
0.148 0.039
0.086
0.029
0.288
0.798
0.437 0.136 0.022
0.075
GIC D MA
0.962
0.137 0.147
0.068
0.104
0.003
GIC FORT
0.389
0.9
0.053
0.105 0.056
0.064
GIC GRO1
0.943
0.135
0.176 0.083
0.07
0.005
HDFC BAL
0.922
0.365 0.003 0.016
0.023 0.018
HDFC GRO
0.392
0.122
0.689
0.168 0.035
0.036
HDFC INC
0.692 0.674
0.033 0.046
0.018 0.001
HDFC IN1
0.349 0.379 0.033
0.747 0.222
0.021
HDFC LIQ
0.695 0.711 0.065
0.02 0.001 0.016
HDFC LI1
0.372
0.725 0.151
0.259
0.062
0.063
IL FS BO
0.448
0.875
0.032 0.067 0.064
0.01
IL FS EC
0.649
0.715
0.034
0.076 0.101
0.03
IL FS GR
0.812
0.557
0.051
0.048 0.04
0.043
IL FS G1
0.81
0.565
0.048
0.053 0.038
0.047
IL FS G2
0.582
0.73
0.212 0.102 0.083 0.025
ING BALA
0.326
0.901
0.145 0.001 0.099 0.005
ING GROW
0.359
0.888
0.144
0.008 0.075 0.034
ING GRO1
0.254
0.092
0.854
0.208 0.036 0.13
ING INC1
0.7
0.708
0.066
0.017 0.018 0.005
ING INC2
0.725 0.679 0.084
0.042 0.015 0.01
ING TRE1
JARDINE
0.569
0.219
0.374
0.26
0.047 0.053
JARDINE1
0.666 0.739
0.072 0.011 0.002 0.015
0.266 0.22
0.176 0.191 0.108 0.041
JM BALAN
0.766
0.517 0.095
0.067 0.054 0.09
JM BASIC
0.376
0.905
0.034
0.16 0.006
0.019
JM EQUIT

7
0.032
0.098
0.008
0.038
0.17
0.004
0.228
0.045
0.034
0.032
0.3
0.019
0.13
0.009
0.001
0.117
0.135
0.113
0.076
0.004
0.033
0.319
0.019
0.048
0.17
0.072

Component
8
0.001
0.017
0.036
0.051
0.032
0.017
0.119
0.045
0.08
0.003
0.193
0.079
0.036
0.043
0.048
0.09
0.047
0.058
0.005
0.001
0.011
0.118
0.006
0.011
0.103
0.043

Appendix (Continued)

0.006
0.062
0.012
0.014
0.067
0.051
0.135
0.014
0.071
0.019
0.139
0.036
0.01
0.003
0.001
0.025
0.032
0.015
0.213
0.001
0.013
0.289
0.001
0.253
0.121
0.006

9
0.016
0.047
0.084
0.038
0.012
0.026
0.258
0.005
0.035
0.004
0.043
0.023
0.016
0.055
0.053
0.071
0.05
0.04
0.051
0.015
0.014
0.123
0.026
0.434
0.078
0.031

10
0.143
0.058
0.032
0.036
0.041
0.015
0.126
0.025
0.071
0.016
0.026
0.043
0.016
0.029
0.029
0.023
0.002
0.044
0.091
0.011
0.006
0.144
0.014
0.232
0.073
0.017

11
0.12
0.017
0.015
0.005
0.015
0.041
0.064
0.006
0.07
0.026
0.008
0.023
0.002
0.023
0.019
0.033
0.003
0.024
0.016
0.039
0.02
0.027
0.036
0.329
0.089
0.004

12

0.12
0.095
0.023
0.004
0.003
0.009
0.053
0.001
0.034
0.005
0.148
0.046
0.029
0.02
0.023
0.002
0.01
0.01
0.018
0.011
0.003
0.253
0.018
0.113
0.013
0.001

13

November 14, 2005

12:19
WSPC/155-RPBFMP

678 Luis Ferruz Agudo & Cristina Ortiz L

azaro

00055.tex

0.733
0.867
0.871
0.476
0.722
0.148
0.953
0.198
0.711
0.108
0.711
0.18
0.64
0.273
0.603
0.284
0.654
0.32
0.676
0.456
0.237
0.521
0.683
0.56
0.603

0.669
0.089 0.049 0.011
0.002
0.116
0.264
0.034
0.004
0.233
0.419
0.026 0.064 0.032 0.124
0.372 0.089
0.683 0.214
0.038
0.688
0.033
0.003 0.015 0.007
0.96
0.086
0.142
0.039
0.093
0.244
0.119 0.002
0.077 0.013
0.07
0.703
0.461
0.153
0.182
0.7
0.039
0.009 0.007 0.005
0.182
0.692
0.47
0.156
0.186
0.701
0.036
0.011 0.006 0.006
0.396
0.287
0.314
0
0.168
0.7
0.025 0.02 0.001
0
0.608
0.505
0.368
0.228
0.103
0.787
0.076 0.013
0.013 0.011
0.022
0.704
0.512
0.115
0.135
0.746
0.083 0.039 0.017
0.003
0.249 0.252
0.152
0.178
0.168
0.662
0.03 0.035 0.062 0.069
0.833 0.079
0.134
0.149
0.018
0.956
0.004
0.119 0.026 0.016
0.406
0.183
0.232 0.128
0.031
0.706
0.011
0.048 0.019 0.013
0.758
0.01
0.112 0.116 0.025
0.78
0.098 0.003 0.057
0.022

2
0.001
0.078
0.055
0.178
0.018
0.041
0.01
0.001
0.01
0.003
0.009
0.196
0.034
0.182
0.039
0.013
0.035
0.672
0.258
0.067
0.01
0.097
0.053
0.229
0.016

7
0.009
0.036
0.018
0.151
0.002
0.045
0.011
0.028
0.004
0.026
0.004
0.258
0.026
0.1
0.011
0.044
0.011
0.21
0.068
0.008
0.017
0.035
0.001
0.019
0.013

8
0.022
0.254
0.144
0.066
0.014
0.056
0.043
0.259
0.017
0.27
0.018
0.109
0.033
0.074
0.028
0.122
0.027
0.047
0.033
0.033
0.02
0.04
0.014
0.02
0.009

9
0.004
0.036
0.035
0.028
0.001
0.033
0.045
0.17
0.007
0.171
0.006
0.14
0.105
0.023
0.046
0.118
0.031
0.08
0.026
0.008
0.033
0.207
0.028
0.006
0.02

10
0.027
0.117
0.096
0.043
0.007
0.021
0.018
0.174
0.014
0.173
0.014
0.357
0.04
0.059
0.028
0.182
0.007
0.18
0.073
0.08
0.024
0.008
0.004
0.067
0.046

11
0.012
0.015
0.012
0.042
0.004
0.004
0.01
0.05
0.004
0.048
0.003
0.328
0.024
0.011
0.033
0.067
0.03
0.136
0.029
0.127
0.006
0.172
0.027
0.081
0.046

12

0.012
0.023
0.009
0.067
0.011
0.008
0.002
0.108
0.011
0.108
0.012
0.011
0.059
0.104
0.008
0.053
0.005
0.19
0.069
0.044
0.016
0.098
0.001
0.005
0.009

13

12:19

JM G SEC
JM G SE1
JM G SE2
JM HIGH
JM INCOM
K 30 GR
K BALANC
K BOND D
K BOND 1
K BOND W
K BOND 3
K GILT S
K GILT 2
K GILT 7
K GILT 8
K GILT 9
K GILT 10
K LIQUID
K LIQUI1
K MNC G
K TECH
LIC BOND
LIC BON1
LIC DH12
LIC EQUI

Component

Appendix (Continued)

November 14, 2005

WSPC/155-RPBFMP
00055.tex

Mutual Fund Management in India 679

LIC GOVT
LIC GOV1
PNB BALA
PNB BAL1
PNB DEBT
PNB DEB1
PRINCIP1
PRINCIP2
PRINCIP3
PRINCIP5
PRINCIP6
PRINCI14
PRUDENT2
PRUDENT3
PRUDENT4
PRUDENT5
PRUDENT6
PRUDENT7
PRUDENT8
PRUDENT9
PRUDEN10
PRUDEN12
PRUDEN13
PRUDEN15
PRUDEN17
PRUDEN18

0.477
0.754
0.601
0.556
0.639
0.725
0.037
0.703
0.712
0.839
0.815
0.209
0.332
0.273
0.732
0.464
0.611
0.311
0.688
0.072
0.698
0.34
0.703
0.185
0.949
0.95

3
0.477
0.041
0.252
0.271
0.365
0.068
0.18
0.068
0.077
0.034
0.028
0.28
0.269
0.425
0.123
0.078
0.051
0.325
0.2
0.895
0.037
0.245
0.19
0.245
0.079
0.079

2
0.454
0.646
0.696
0.729
0.51
0.682
0.891
0.704
0.695
0.502
0.54
0.908
0.853
0.164
0.661
0.096
0.75
0.871
0.642
0.008
0.71
0.09
0.47
0.082
0.175
0.177

0.06
0.028
0.007
0.031
0.145
0.002
0.252
0.029
0.025
0.039
0.049
0.112
0.002
0.137
0.054
0.319
0.039
0.124
0.161
0.245
0.003
0.215
0.103
0.161
0.189
0.189

4
0.26
0.033
0.17
0.173
0.216
0.035
0.034
0.009
0.006
0.078
0.072
0.031
0.116
0.325
0.043
0.156
0.051
0.034
0.089
0.022
0.019
0.549
0.313
0.04
0.074
0.072

5
0.065
0.007
0.103
0.101
0.084
0.012
0.051
0.015
0.012
0.009
0.012
0.02
0.011
0.183
0.011
0.247
0.008
0.015
0.004
0.148
0.001
0.387
0.208
0.205
0.002
0.001

7
0.172
0.055
0.117
0.107
0.031
0.004
0.01
0.033
0.031
0.104
0.104
0.145
0.051
0.074
0.006
0.116
0.07
0.031
0.161
0.089
0.012
0.253
0.123
0.234
0.079
0.076

Component
8
0.052
0.006
0.018
0.005
0.115
0.015
0.015
0.005
0.008
0.018
0.02
0.048
0.009
0.341
0.006
0.5
0.006
0.006
0.027
0.034
0.007
0.304
0.177
0.363
0.017
0.02

Appendix (Continued)

0.049
0.005
0.101
0.098
0.114
0.011
0.095
0.017
0.017
0.058
0.059
0.007
0.014
0.068
0.003
0.021
0.014
0.038
0.007
0.205
0.008
0.097
0.042
0.055
0.016
0.019

9
0.165
0
0.068
0.073
0.043
0.003
0.166
0.007
0.011
0.051
0.058
0.013
0.067
0.318
0.004
0.344
0.045
0.05
0.047
0.027
0.011
0.196
0.114
0.401
0.031
0.028

10
0.083
0.027
0.016
0.021
0.002
0.028
0.086
0.013
0.013
0.03
0.023
0.03
0.042
0.282
0.039
0.06
0.02
0.061
0.044
0.026
0.006
0.048
0.036
0.06
0.012
0.008

11
0.076
0.019
0.071
0.05
0.05
0.012
0.061
0.022
0.025
0.067
0.067
0.012
0.092
0.232
0.03
0.02
0.022
0.006
0.021
0.068
0.008
0.031
0
0.367
0.026
0.026

12

0.08
0.005
0.006
0.004
0.195
0.002
0.005
0.002
0.004
0.045
0.048
0.021
0.039
0.19
0.017
0.056
0.022
0.039
0.021
0.051
0.003
0.186
0.106
0.048
0.014
0.021

13

November 14, 2005

12:19
WSPC/155-RPBFMP

680 Luis Ferruz Agudo & Cristina Ortiz L

azaro

00055.tex

PRUDEN19
0.362
0.913
0.037 0.003
0.06 0.025
RELIANCE
0.532 0.159 0.258
0.334
0.338
0.27
RELIANC1
0.949
0.017 0.204
0.101 0.009 0.079
RELIANC2 0.231
0.112
0.814 0.117 0.346
0.031
RELIANC3
0.091 0.202
0.891
0.174
0.03 0.112
RELIANC4
0.204 0.588
0.724 0.11 0.133
0.04
RELIANC5
0.007 0.411
0.854 0.049 0.023
0.076
RELIANC6
0.709 0.701
0.052
0.007 0.025 0.004
RELIANC7 0.758
0.326
0.473 0.146 0.136
0.021
RELIANC8
0.705 0.702 0.071
0.036 0.01 0.013
RELIANC9
0.717 0.689 0.048
0.06
0
0.014
RELIAN10
0.672 0.644 0.035
0.264
0.105 0.071
RELIAN11
0.454 0.561
0.428
0.287
0.184
0.011
RELIAN12
0.924 0.14 0.234
0.187
0.047
0.002
0.412
0.9
0.026
0.059 0.026
0.044
SBI MAGN
0.702 0.706 0.067
0.024 0.006 0.015
SBI MAG2
0.031
0.876
0.007
0.148 0.194 0.031
SBI MAG4
0.24
0.963
0.014
0.026 0.02
0.031
SBI MA16
0.655
0.506 0.087 0.214
0.191
0.013
SBI MA17
0.354
0.922 0.026
0.047 0.019
0.025
SBI MA18
0.675
0.717
0.141 0.035
0.002
0.012
SUN F C
0.282
0.933
0.132 0.069 0.052 0.002
SUN F C2
0.12
0.05
0.816
0.167
0.279 0.116
SUN F C3
0.714 0.698
0.043 0.009 0.006 0.01
SUN F C4
0.698 0.71 0.065
0.013 0.009 0.012
SUN F C6

7
0.074
0.053
0.079
0.213
0.104
0.014
0.039
0.013
0.072
0.033
0.032
0.008
0.116
0.079
0.072
0.028
0.351
0.058
0.178
0.097
0.004
0.035
0.156
0.016
0.033

Component
8
0.061
0.217
0.014
0.012
0.074
0.004
0.019
0.003
0.028
0.009
0.009
0.01
0.092
0.076
0.039
0.004
0.058
0.018
0.156
0.003
0.023
0.083
0.145
0.001
0.002

Appendix (Continued)

0.021
0.346
0.084
0.108
0.18
0.034
0.007
0.011
0.095
0.017
0.023
0.006
0.142
0.019
0.024
0.014
0.006
0.032
0.268
0.047
0.038
0.049
0.083
0.01
0.021

9
0.079
0.135
0.088
0.099
0.017
0.072
0.021
0.012
0.029
0.007
0
0.01
0.135
0.032
0.01
0.011
0.112
0.024
0.127
0.052
0.025
0.061
0.04
0.01
0.003

10
0.03
0.181
0.04
0.02
0.066
0.044
0.025
0.018
0.073
0.01
0.008
0.043
0.012
0.015
0.005
0.012
0.011
0.002
0.049
0.009
0.026
0.018
0.026
0.012
0.015

11
0.004
0.167
0.043
0.055
0.049
0.04
0.046
0.01
0.087
0.023
0.028
0.004
0.065
0.094
0.032
0.021
0.09
0.05
0.08
0.009
0.013
0.006
0.06
0.003
0.022

12

0.038
0.023
0.001
0.024
0.08
0.042
0.096
0.004
0.091
0
0.02
0.041
0.125
0.028
0.002
0.003
0.031
0.022
0.046
0.011
0.03
0.034
0.141
0.015
0.004

13

November 14, 2005

12:19
WSPC/155-RPBFMP
00055.tex

Mutual Fund Management in India 681

SUN F C7
SUN F C8
SUN F C9
SUN F 10
SUN F 11
SUN F 12
SUNDARAM
SUNDARA1
SUNDARA5
SUNDAR12
SUNDAR13
SUNDAR14
TATA BAL
TATA GIL
TATA GI1
TATA INC
TATA IN2
TATA IN3
TATA LIF
TATA LIQ
TATA LI1
TATA PUR
TATA SEL
TATA TAX
TATA YOU
TEMPLETO

2
0.313
0.707
0.132
0.119
0.892
0.868
0.709
0.297
0.463
0.461
0.443
0.496
0.57
0.623
0.486
0.727
0.199
0.003
0.852
0.052
0.544
0.866
0.51
0.417
0.17
0.05

0.036
0.704
0.311
0.917
0.359
0.464
0.702
0.155
0.871
0.871
0.882
0.856
0.79
0.769
0.604
0.681
0.323
0
0.368
0.664
0.731
0.429
0.839
0.858
0.875
0.98
0.625
0.027
0.702
0.141
0.088
0.133
0.027
0.865
0.071
0.062
0.035
0.05
0.056
0.098
0.543
0.023
0.515
0.742
0.203
0.392
0.059
0.078
0.035
0.012
0.19
0.047

3
0.416
0.035
0.243
0.14
0.059
0.031
0.028
0.023
0.011
0.004
0.015
0
0.017
0.061
0.199
0.057
0.073
0.354
0.08
0.239
0.064
0.001
0.006
0.02
0.132
0.06

4
0.113
0.018
0.274
0.07
0.082
0
0.014
0.015
0.044
0.047
0.049
0.045
0.119
0.042
0.061
0.012
0.09
0.22
0.015
0.22
0.071
0.143
0.066
0.187
0.191
0.019

5
0.003
0.019
0.039
0.052
0.011
0.027
0.002
0.086
0.035
0.031
0.041
0.032
0.023
0.01
0.073
0.015
0.072
0.266
0.001
0.166
0.128
0.033
0.006
0.013
0.02
0.065

7
0.281
0.009
0.209
0.039
0.12
0.028
0.031
0.088
0.096
0.115
0.107
0.09
0.133
0.008
0.096
0.002
0.157
0.077
0.098
0.046
0.037
0.131
0.001
0.001
0.027
0.022

Component
8
0.124
0.022
0.179
0.145
0
0.006
0.004
0.056
0.02
0.024
0.033
0.016
0.058
0.006
0.014
0.022
0.129
0.078
0.069
0.057
0.036
0.084
0.028
0.065
0.177
0.011

Appendix (Continued)

0.052
0.013
0.183
0.028
0.001
0.029
0.023
0.089
0.005
0.005
0.004
0.003
0.019
0.008
0.048
0.001
0.407
0.215
0.047
0.033
0.056
0.017
0.041
0.024
0.011
0.109

9
0.218
0.025
0.09
0.075
0.082
0.002
0.007
0.098
0.028
0.035
0.037
0.035
0.043
0.007
0.019
0.025
0.137
0.003
0.1
0.059
0.053
0.049
0.027
0.022
0.023
0.001

10
0.069
0.011
0.174
0.003
0.032
0.026
0.007
0.093
0.007
0.003
0.011
0.014
0.049
0.03
0.019
0.007
0.395
0.092
0.064
0.298
0.156
0.055
0.043
0.113
0.074
0.042

11
0.097
0.002
0.014
0.147
0.032
0.004
0.006
0.026
0.028
0.033
0.023
0.014
0.002
0.014
0.048
0.002
0.165
0.037
0.141
0.075
0.118
0.005
0.053
0.031
0.177
0.008

12

0.089
0.001
0.06
0.025
0.007
0.008
0.005
0.073
0.003
0.006
0.01
0.005
0.007
0.003
0.004
0.007
0.014
0.026
0.099
0.11
0.037
0.002
0.084
0.095
0.026
0.018

13

November 14, 2005

12:19
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682 Luis Ferruz Agudo & Cristina Ortiz L

azaro

00055.tex

TEMPLET1
TEMPLET2
TEMPLET3
TEMPLET7
TEMPLET8
TEMPLE10
TEMPLE11
TEMPLE12
TEMPLE13
TEMPLE14
TEMPLE18
TEMPLE19
TEMPLE20
TEMPLE21
UTI EQU1
UTI GROW
UTI MAS9
UTI MA12
UTI MA13

0.99
0.829
0.191
0.18
0.733
0.914
0.182
0.7
0.099
0.632
0.793
0.375
0.492
0.185
0.732
0.391
0.219
0.451
0.327

0.021 0.003 0.029

0.031 0.015
0.548
0.062 0.041
0.013
0.016
0.911
0.279 0.112
0.035
0.021
0.28
0.846 0.244 0.089
0.189
0.664
0.11 0.06 0.044
0.014
0.296
0.129 0.078
0.104
0.022
0.443
0.76
0.061
0.145
0.169
0.683
0.052
0.013 0.011 0.006
0.118 0.027
0.047
0.045
0.021
0.64 0.052
0.003 0.011 0.01
0.606
0.002 0.024
0.017 0.017
0.26
0.737
0.009
0.097
0.164
0.317
0.732 0.059 0.065 0.07
0.677
0.502 0.132
0.084
0.149
0.655
0.063
0.053 0.076
0.022
0.899
0.059 0.037 0.044
0.002
0.907
0.283 0.078
0.004
0.023
0.838
0.015
0.209 0.035
0.088
0.913
0.076
0.095 0.004
0.064

2
0.085
0.04
0.154
0.078
0.007
0.169
0.059
0.039
0.245
0.002
0.006
0.086
0.025
0.124
0.015
0.047
0.144
0.05
0.062

7
0.021
0.005
0.045
0.005
0.006
0.059
0.003
0.002
0.078
0.03
0.009
0.138
0.015
0.022
0.023
0.061
0.036
0.062
0.084

8
0.029
0.001
0.006
0.124
0.009
0.018
0.207
0.03
0.051
0.033
0.008
0.242
0.114
0.15
0.034
0.02
0.01
0.027
0.033

9
0.021
0.012
0.01
0.034
0.002
0.012
0.017
0.009
0.199
0.012
0.019
0.151
0.059
0.166
0.043
0.045
0.006
0.059
0.025

10
0.015
0.003
0.033
0.058
0.03
0.035
0.139
0.003
0.155
0.02
0.017
0.005
0.067
0.182
0.006
0.055
0.038
0.043
0.033

11

0.037
0.001
0.01
0.036
0.016
0.042
0.079
0.009
0.062
0.029
0.017
0.055
0.136
0.03
0.01
0.019
0.018
0.038
0.087

12

0.042
0.001
0.016
0.039
0.004
0.013
0.01
0.004
0.392
0.013
0.01
0.062
0.001
0.094
0.018
0.044
0.017
0.007
0.019

13

12:19

Component

Appendix (Continued)

November 14, 2005

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00055.tex

Mutual Fund Management in India 683

UTI NIFT
UTI PRIM
ZURICH I
ZURICH 1
ZURICH 2
ZURICH 3
ZURICH 5
ZURICH 6
ZURICH 7
ZURICH 9
ZURICH10
ZURICH11
ZURICH12
ZURICH13
ZURICH14
ZURICH15
ZURICH16
ZURICH17
ZURICH18

0.143
0.888
0.857
0.852
0.922
0.987
0.66
0.244
0.694
0.924
0.991
0.076
0.642
0.228
0.744
0.504
0.647
0.666
0.964

0.584
0.353
0.423
0.419
0.171
0.013
0.723
0.74
0.701
0.237
0.094
0.335
0.738
0.224
0.638
0.542
0.747
0.661
0.186

2
0.215
0.078
0.169
0.17
0.202
0.024
0.059
0.003
0.071
0.226
0.006
0.764
0.103
0.734
0.086
0.059
0.032
0.245
0.006

5
0.216
0.092
0.066
0.072
0
0.05
0.019
0.003
0.008
0.09
0.009
0.063
0.035
0.007
0.066
0.418
0.044
0.052
0.09

4
0.16
0.043
0.092
0.096
0.17
0.083
0.008
0.344
0.019
0.059
0.024
0.02
0.065
0.358
0.09
0.371
0.009
0.019
0.014

0.538
0.155
0.028
0.027
0.019
0.002
0.018
0.067
0.036
0.012
0
0.03
0.008
0.048
0.002
0.208
0.039
0.008
0.003

6
0.237
0.086
0.07
0.067
0.131
0.083
0.036
0.215
0.018
0.099
0.024
0.008
0.057
0.02
0.012
0.1
0.033
0.013
0.109

7
0.247
0.011
0.058
0.056
0.021
0.003
0.008
0.124
0.002
0.003
0.009
0.116
0.013
0.261
0.012
0.007
0.012
0.016
0.003

8
0.302
0.1
0.018
0.024
0.066
0.008
0.045
0.005
0.009
0.015
0.018
0.074
0.008
0.088
0.005
0.047
0.026
0.096
0.028

9
0.004
0.021
0.048
0.051
0.06
0.036
0.013
0.009
0.004
0.063
0.04
0.081
0.031
0.07
0.014
0.105
0.026
0.005
0.046

10
0.012
0.03
0.004
0.008
0.04
0.015
0.025
0.098
0.013
0.008
0.01
0.012
0.037
0.073
0.047
0.017
0.023
0.059
0.001

11

0.032
0.004
0.104
0.112
0.001
0.029
0.016
0.045
0.03
0.014
0.031
0.092
0.022
0.04
0.012
0.069
0.033
0.005
0.058

12

0.058
0.028
0.017
0.019
0.009
0.001
0.005
0.066
0.003
0.004
0.007
0.103
0.006
0.013
0.031
0.073
0.007
0.021
0.003

13

12:19

Component

Appendix (Continued)

November 14, 2005

WSPC/155-RPBFMP

684 Luis Ferruz Agudo & Cristina Ortiz L

azaro

00055.tex

November 14, 2005

12:19

WSPC/155-RPBFMP

00055.tex

Mutual Fund Management in India 685

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Sehgal, S (July 1999). Market timing ability of mutual fund managers: The
Indian experience, 6th Annual Conference of Asia-Pacic Finance Association,
Melbourne (Australia), 1214.
Shu, P, Y Yeh and T Yamada (2002). The behavior of Taiwan mutual fund investors.
Performance and fund ows. Pacific-Basin Finance Journal, 10, 583600.
Thomas, S (1999). Fund Management in India: Challenges and Opportunities. New
Delhi: Tata McGraw-Hill.
Waghmare, T (1998). The Future of Fund Management in India. New Delhi: Tata
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