A Study on performance analysis of equity Funds

Abstract

Equity mutual funds have emerged as one of the most preferred investment avenues for individuals seeking long-term capital appreciation through professionally managed and diversified investment portfolios. The increasing participation of investors in mutual funds has highlighted the importance of evaluating fund performance using appropriate financial measures. This study examines the performance of equity mutual funds by analysing the relationship between return and risk through established financial concepts and performance evaluation techniques. The study is based on secondary data collected from published sources and applies risk-adjusted performance measures to assess the effectiveness of equity mutual funds. The paper reviews major financial theories, including Modern Portfolio Theory, Risk–Return Theory, and the Sharpe Ratio, to provide a theoretical foundation for evaluating investment performance. The findings indicate that equity mutual funds offer an effective investment opportunity when supported by proper portfolio diversification and risk management. Investors should evaluate mutual fund performance by considering both returns and associated risks rather than relying solely on historical returns. The study concludes that systematic performance evaluation enables investors to make informed investment decisions and contributes to achieving long-term financial objectives.