International Journal of All Research Education and Scientific Methods (IJARESM), ISSN: 2455-6211

Volume 9, Issue 4, April -2021, Impact Factor: 7.429, Available online at: www.ijaresm.com

“A Comparative Analysis of Performance of SBI

Mutual Fund and HDFC Mutual Fund”
Riddhi Dhumal1, Alka Parmar2, Dr. Divyang Joshi3
1,2
MBA Student, Parul Institute of Management and Research, Parul University Waghodia, Vadodara, India
3
Assistant professor, Parul Institute of Management and Research, Parul University Waghodia, Vadodara, India

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ABSTRACT

A Mutual Fund is a trust that bridges the gap between the savings of a number of investors who share a
common financial goal. The collected money is then invested in capital market avenues such as shares,
debentures and other profitable securities. Revenue earned by these investments is shared by its unit holders to
the proportion to the number of units owned by them. indian mutual fund has gained a lot of popularity in last
few years. Unit trust of india was the first concern to deal with mutual fund in india. Earlier only uti enjoyed a
monopoly in mutual fund industry but with time many new players entered in the market due to which uti
monopoly broke down. mutual fund is suitable investment for common individual as it offeres an opportunity to
invest in diversified, professionally managed bunch of securities at a lower cost. This present study is focused on
to compare the performance on the investment of mutual fund with special reference to sbi mutual fund and
hdfc mutual fund. To conduct the study we have taken beta, standard deviation, sharpe ratio, treynor ration and
jenson ratio. and overall analysis revealed that hdfc mutual fund is better than sbi mutual fund.

Key words: Mutual fund, Beta, Standard Deviation, Sharpe Ratio, Treynor Ratio, Jenson Ratio, Investment

INTRODUCTION

A Mutual Fund serves as a link between the investor and the securities market by mobilizing savings from the investors
and investing them in the securities market to generate returns. Thus, a mutual fund is akin to portfolio management
services (PMS). Although, both are conceptually same, they are different from each other. Portfolio management
services are offered to high net worth individuals; taking into account their risk profile, their investments are managed
separately. In the case of mutual funds, savings of small investors are pooled under a scheme and the returns are
distributed in the same proportion in which the investments are made by the investors/unit-holders.

Mutual fund is a collective savings scheme. Mutual funds play an important role in mobilizing the savings of small
investors and channelizing the same for productive ventures in the Indian economy. Mutual fund is one of the the
important option that offers investor to balance risk and return.

LITERATURE REVIEW

Das, Amit Kumar said that Mutual fund is an important segment of the financial system in India. It is a mechanism for
pooling the savings of large number of investors for collective investments with the objective of ensuring attractive
yields and appreciation in their value. The mutual funds industry is expected to play a vital role in financial
intermediation in the Indian economy; hence mutual funds collective ability to draw investment funds and the mode of
use of those funds are of considerable interest.

Babasab Patil (2012), undertook a research on the topic,”The Analysis and Comparative Study of SBI and HDFC
Mutual funds” wherein he applied various statistical techniques like Standard Deviation, Variance, Covariance and
Correlation to evaluate the risks and returns of SBI Magnum Equity Fund-Growth and HDFC Equity Fund-Growth
over the time period of 1 year (from 2nd Apr. 2007 to 31st Mar. 2008). He concluded that SBI Magnum Equity fund
had higher risk and higher return when compared to HDFC Equity fund but when investor’s expectations are
considered, the author believed that both the funds underperformed

Mrinal Manish (2010) ,carried out a research on the topic ,”Comparative analysis of Mutual Funds with special
reference to SBI Mutual Funds” wherein he compared the 5 year performances of SBI Magnum Contra and SBI
Magnum Equity with some selected Private Sector Mutual funds in order to ascertain the returns and risk offered by
these funds. After considering all the statistical parameters, it was found that Magnum Contra was the best fund in the
category.

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 International Journal of All Research Education and Scientific Methods (IJARESM), ISSN: 2455-6211
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Dr. Raghu G Anand ,Mutual funds offer various investment options like growth option, dividend pay-out option,
dividend reinvestment option, systematic investment plan (SIP), systematic withdrawal plan (SWP), equity oriented
fund, debt fund, index fund, etc. Though mutual fund investment provides a wide range of benefits in terms of
professional management, diversified portfolio, tax savings, liquidity, certain risks too are associated with the same.
These include risk-return trade off, market risk, political risk, inflation risk, credit risk, interest rate risk and liquidity
risk

Y. Maheswari, inspected the exhibition of selected mutual fund schemes that the hazard profile of the total mutual
fund universe can be precisely thought about by a basic market index that offers comparative month to month liquidity,
returns, systematic and unsystematic hazard and complete fund investigation by utilizing the unique reference of
Sharpe and Treynor's proportion.

Dr. Rajesh Manikraoji Naik and M R Senapathy (2013), conducted a research on the topic,” A Comparative Study
On The Performance Of Mutual Funds SBI Mutual Funds V/S Others” wherein they compared the 1 year performance
(from 2011-2012) of SBI Magnum Equity Mutual Fund with HDFC top 100 Mutual Fund on the basis of Standard
Deviation, Sharpe ratio and Beta. Conclusively the authors said that, both HDFC Mutual Fund and SBI Mutual fund are
good funds to invest in and there is only a marginal difference between them.

OBJECTIVES

 To analysis which provides better returns from HDFC & SBI.

 To analyze the concept and parameters of mutual fund
 To compare schemes return and risk with benchmark i.e nifty 50 NSE

RESEARCH METHODOLOGY

 Research Method: Quantitative

 Descriptive Research

Data Collection
Secondary Data:
Secondary data is collected from Internet and analyze different Magazines and Research Papers through various
websites like money control.

Sample size
Monthly NAV’s of SBI MUTUAL FUND and HDFC MUTUAL FUND for comparison and NSE 100 monthly
indices.

Method of analysis
 Return
 Standard Deviation
 Beta
 Sharpe Ratio
 Treynor Ratio
 Jenson Ratio
DATA ANALYSIS

The Present study is based on analysis of secondary data which is collected from Reviewing different research papers
and articles published by authors. The data of NAV is collected for Period from 1st January’2018 to 31st

December’2020. The data so collected has been tabulated and analyzed with MS Excel. The Benchmark index for this
study is taken to be broad 100-share based NSE National Index. Hence it will cover different scheme portfolios and
therefore is expected to provide better performance benchmark. Risk free return, which refers to that minimum return
on investment that has no risk of losing investment over which it is earned, has been taken as Indian Government...

Returns = NAV current close – NAV previous close

Standard Deviation = 𝜎 = √∑(𝑥 − 𝑥)2

N

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 International Journal of All Research Education and Scientific Methods (IJARESM), ISSN: 2455-6211
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Where, x= Return on portfolio, x or (y) = average return on portfolio,

N= no of months
Beta: Beta, also known as the “beta coefficient “ , is a measure of volatility or systematic risk, of a security, a
portfolio in comparison to te market as whole.

Beta here is calculated as S.D.p / S.D.b

where SD.p = standard deviation of portfolio

SD.b = standard deviation of benchmark index

Sharpe Ratio: shape ratio can be used to rank desirability of fund or portfolio.
Formula is = Ra - Rf
σ
Where, Ra= Concerned portfolio return, Rf = Risk free rate, σ = portfolio standard deviation

Trenyor ratio:
Trenyor ratio is the measurement of returns earned in excess of that which could have been earned on an investment
that has no diversifiable risk, per each unit of market risk assumed.
T = Ri- Rf
βi
Where, T = Trenyor ratio, Ri = portfolio I’s return, Rf= Risk free rate , β= portfolio I’s beta

Jenson Ratio: It is a risk adjusted performance measure that represents the average return on portfolio or investment.
Formula = {Rp – (Rf +βp * (Rm – Rf) ) }

where , Rp= Expected portfolio return

βp= Beta of the portfolio
Rm= Expected market return
Rf= Risk free rate

RETURNS

Table. 1: SBI Magnum equity ESG Fund 2018

Month Open Close Return% x-y x-y2 Benchmark

Index
January 98.5 102.89 4.5 3.791667 14.3764 5.833412

February 102.87 98.76 -4 -4.70833 22.1684 -5.99946

March 98.28 96.09 -2.23 -2.9383 8.63838 -3.11727

April 96.78 101.9 5.29 4.5816 20.9916 4.93456

May 101.4 102.16 0.75 0.04166 0.0017 -0.37938

June 101.54 100.98 -0.56 -1.26833 1.6086 0.157465

July 100.47 106.52 6.02 5.3116 28.2138 6.43633

August 106.26 109.1 2.67 1.9167 3.8481 3.27053

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 International Journal of All Research Education and Scientific Methods (IJARESM), ISSN: 2455-6211
Volume 9, Issue 4, April -2021, Impact Factor: 7.429, Available online at: www.ijaresm.com

September 108.1 101.72 -54.9 -6.6083 43.6700 -4.09431

October 102.07 97.91 -4.08 -4.7883 22.9281 -5.93054

November 97.97 103.41 5.55 4.8416 23.4417 4.2376

December 103.14 103.65 0.49 -0.2183 0.0476 0.09026

Total 8.5 189.93056 5.2674

It can be computed from Table 1, that from 1st Jan’2018 to 31st Dec’2018 SBI Magnum equity ESG Fund 2018 mutual
fund has Total return of 8.5 % , x-y2 is 189.93056 and benchmark index total was 5.2674.
Y= 0.70833 , STD DEV=3.9783 , BETA = 0.88603
Y = total return / no of months
= 8.5/12
= 0.70833

Table 2: SBI Magnum equity ESG Fund 2019

Month Open Close Return% x-y x-y2 Benchmark

Index
January 103.77 103.72 -0.05 -1.4891 2.2176 -0.82890

February 104.59 101.99 -2.48 -3.91916 15.35986 -0.43360

March 102.48 109.76 7.1 5.66083 32.04503 7.8963

April 110.2 111.27 0.98 -0.45916 0.218340 0.652719

May 110.75 114.1 3.02 1.58083 2.49903 1.88017

June 115.39 113.6 -1.55 -2.98916 8.935117 -2.18499

July 114.2 107.68 -5.71 -7.14916 51.110584 -5.68864

August 106.12 107.4 1.2 -0.23916 0.057200 0.319.35

September 105.13 114.12 8.55 7.11083 5.056395 5.784602

October 113.19 117.59 3.89 2.45083 6.00658 3.45850

November 117.21 118.16 0.81 -0.62916 0.39585 1.676891

December 117.97 119.76 1.51 0.07083 0.005017 1.165969

Total 17.27 169.4069 13.6981

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 International Journal of All Research Education and Scientific Methods (IJARESM), ISSN: 2455-6211
Volume 9, Issue 4, April -2021, Impact Factor: 7.429, Available online at: www.ijaresm.com

It can be computed from Table 2, that from 1st Jan’2019 to 31st Dec’2019 SBI Magnum equity ESG Fund 2019 mutual
fund has Total return of 17.27 % , x-y2 is 169.4069 and benchmark index total was 13.6981
y = Total return / no of months
=17.27/12
=1.43916

Y= 1.439
STD DEV= 3.75728
BETA = 1.055
Table 3: SBI Magnum equity ESG Fund 2020

Month Open Close Return% x-y x-y2 Benchmark

Index
January 119.73 119.5 -0.19 0.86916 0.75545 -1.46830

February 117.35 112.99 -3.71 -2.65083 7.0269 -4.12667

March 112.03 85.92 -23.31 -22.25083 495.09958 -23.0371

April 82.67 96.72 16.99 18.04916 325.7724 13.03713

May 91.35 87.34 -4.39 -3.33083 11.09445 2.713420

June 91.35 87.34 -4.39 -3.33083 11.09445 4.742614

July 91.35 87.34 -4.39 -3.33083 11.09445 6.80506

August 91.35 87.34 -4.39 -3.33083 11.09445 4.64415

September 91.35 87.34 -4.39 -3.33083 11.09445 -2.20371

October 112.45 113.65 1.07 2.12916 4.53350 2.5469

November 113.88 127.05 11.56 12.61916 159.243367 10.80680

December 128.28 137.04 6.83 7.88916 62.239506 6.795901

Total -12.71 1110.14229 21.2606

It can be computed from Table 3, that from 1st Jan’2020 to 31st Dec’2020 SBI Magnum equity ESG Fund 2020 mutual
fund has Total return of -12.71 % , x-y2 is 1110.14229 and benchmark index total was 21.2606

y = total return / no of months

=-12.71/12
= -1.0591

Y= -1.059
STD DEV= 33.3187
BETA = 0.94039

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 International Journal of All Research Education and Scientific Methods (IJARESM), ISSN: 2455-6211
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Table 4: HDFC EQUITY FUND 2018

Month Open Close Return% x-y x-y2 Benchmark

index
January 675.38 699.59 3.58 3.47666 12.08721 5.5203
February 695.76 653.56 -6.06 -6.1633 37.98667 -4.8158
March 646.51 616.41 -4.66 -4.76333 22.68934 -2.9826
April 620.09 650.3 4.87 4.766666 22.72111 5.1348
May 644.17 639.18 -0.77 -0.873333 0.762711 -0.4760
June 633.07 617.9 -2.4 -2.503333 6.26667 0.09099
July 616.05 661.96 7.45 7.346666 53.973511 6.5938
August 660.74 696.94 5.48 5.376666 28.90854 3.02197
September 690.73 642.26 -7.02 -7.12333 50.74187 -5.17008
October 650.18 640.62 -1.47 -1.573333 2.47537 -5.39300
November 642.08 646.7 0.72 0.616666 0.380277 4.2742
December 650.87 660.78 1.52 1.416666 2.006944 -0.58839
Total 1.24 241.0002667 5.21035

It can be computed from Table 1, that from 1st Jan’2018 to 31st Dec’2018 HDFC EQUITY FUND 2018 mutual fund
has Total return of 1.24 % , x-y2 is 241.0002667 and benchmark index total was 5.21035.
y = total return / no of months
= 1.24/12
=0.10333

Y=0.1033
STD DEV= 4.48144
BETA = 0.9327

Table 5: HDFC EQUITY FUND 2019

Month Open Close Return% x-y x-y2 Benchmark

index
January 665.45 661.06 -0.66 -1.65666 2.74454 -0.9345
February 656.94 647.1 -1.5 -2.49666 6.2333 0.16248
March 655.07 716.07 9.31 8.31333 69.11151 7.3051
April 718.7 709.02 -1.35 -2.3466 5.50684 0.2066
May 704.18 732.081 4.07 3.07333 9.4453 1.7415
June 738.97 736.96 -0.3 -1.29666 1.68134 -1.9953
July 736.97 669.34 -7.62 -8.61666 74.2469 -5.7468
August 669.34 640.87 -2.07 -3.06666 9.40444 0.472009
September 640.87 667.84 5.7 4.71333 22.1234 6.0017
October 667.84 702.88 5.25 4.25333 18.09084 4.2415
November 704.08 709.69 0.8 -0.19666 0.038677 1.6718
December 707.58 709.9 0.33 -0.66666 0.44444 1.0622

Total 11.96 219.0696 14.2064

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 International Journal of All Research Education and Scientific Methods (IJARESM), ISSN: 2455-6211
Volume 9, Issue 4, April -2021, Impact Factor: 7.429, Available online at: www.ijaresm.com

It can be computed from Table 1, that from 1 st Jan’2019 to 31st Dec’2019 HDFC EQUITY FUND 2018 mutual fund
has Total return of 11.96 % , x-y2 is 219.0696 and benchmark index total was 14.2064.
y = total return / no of months
= 11.96/12
=0.996666

Y= 0.9966
STD DEV= 4.2726
BETA = 1.1957
Table 6: HDFC Equity Fund 2020

Month Open Close Return% x-y x-y2 Benchmark

index
January 712.78 696.49 -2.29 -0.44583 0.19876 -1.45

February 673.12 641.34 -4.72 -2.87583 8.27041 -4.48

March 633.09 483.78549.73 -23.58 -21.7358 472.4464 -21.7255

April 466.77 489.14 17.77 19.61416 384.715534 14.593

May 521.74 489.14 -6.25 -4.40583 19.41136 0.3324

June 521.74 489.14 -6.25 -4.40583 19.41136 5.8887

July 521.74 489.14 -6.25 -4.40583 19.41136 2.5173

August 521.74 489.14 -6.25 -4.40583 19.41136 5.14463

September 521.74 489.14 -6.25 -4.40583 19.41136 -1.3175

October 599.91 604.92 0.84 2.6841 7.20475 2.4619

November 613.02 962.61 12.98 14.82416 19.75591 10.5007

December 702.87 759.92 8.12 9.9641 99.28461 6.3366

Total -22.13 1288.933292 24.4976

It can be computed from Table 1, that from 1 st Jan’2020 to 31st Dec’2020 HDFC EQUITY FUND 2018 mutual fund
has Total return of -22.13 % , x-y2 is 1288.933292 and benchmark index total was 24.4976.
y = total return / no of months
= -22.13/12
=-1.84416

Y= -1.84416
STD DEV= 10.3639
BETA 1.01618
Beta

Year SBI MAGNUM EQUITY FUND HDFC EQUITY FUND

2018 0.886308 0.9327
2019 1.055526 1.1957

2029 0.940394 1.01618

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Ratio
Sharpe Ratio:
SBI NAGNUM EQUITY ESG HDFC EQUITY FUND
FUND
2018 6.91 -1.13
2019 15.95 1.64
2020 -13.091 -2.5

Treynor Ratio:
SBI NAGNUM EQUITY ESG HDFC EQUITY FUND
FUND
2018 1.39 5.87
2019 12.58 -5.42
2020 -16.61 -25.39

Jenson Ratio
SBI NAGNUM EQUITY ESG HDFC EQUITY FUND
FUND
2018 2.5236 -4.04
2019 3.09 -4.064
2020 -32.9198 -43.4

FINDINGS & CONCLUSION

Standard Deviation of HDFC Growth Fund (10.3936) was more than the S.D. of SBI Magnum Equity Fund (3.97).
Collectively, it can be seen that SBI Mutual Funds were having low S.D. when compared to HDFC Mutual Funds, thus
depicting less historical volatility and less risk involvement.

Beta of HDFC Equity Fund (1.01618) was more than that of SBI Magnum ESG Fund (0.940394) collectively, it could
be said that Beta of whole of the SBI Mutual Funds was less than that of HDFC Mutual funds thus indicating that their
investment will be less volatile than the market and therefore less risk involvement.

It was found that the Sharpe Ratio of HDFC Equity Fund (-13.091) was more than that of SBI Magnum ESG Fund (-
2.5) , Collectively, it was found that Sharpe Ratio of SBI Mutual Funds is relatively higher than that of HDFC Mutual
Funds, indicating that the fund is performing well in respect to the risk associated with it. Hence, SBI Mutual Funds
can be ranked above HDFC Mutual Funds when it comes to desirability of the fund.

Treynor Ratio of HDFC Equity Fund (-25.39) is higher than that of SBI Magnum equity ESG Fund (-16.61) ,
Collectively, it was found that Treynor ratio of SBI Mutual Funds as a whole is relatively higher than that of HDFC
Mutual Funds indicating that the fund’s performance in accordance to systematic risk is high.

Conclusively, it was found that the SBI Mutual Funds as a whole relatively performed better than HDFC Mutual Funds
as it had higher returns; low Standard Deviation, implying low volatility; Low Beta Values, implying less risk
involved; High Sharpe Ratio, thus ranking first when it comes to the desirability of the fund and high Treynor ratio
indicating that the fund’s performance in accordance to systematic risk is high.

LIMITATIONS & FUTURE SCOPE OF STUDY

In our study we have taken only five years of data so in future other researcher can also take the data of 10 years and do
the analysis.

Limited no of statistical tools have been used to analyse the performance of mutual fund. It could be increased so as to
come down at a conclusion with precision.

In the present study only SBI Magnum equity ESG Fund and HDFC equity fund have been taken into consideration. A
similar study could be done by including other types of scheme as well.

In study we have find some difficulties as there were many mutual funds available in the market to choose and invest in
that case choosing wise one is important.

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Only one year has been considered for analyzing and comparing the performance of Mutual funds schemes. This time
period could be extended so as to view the overall performance of the mutual fund schemes.

BIBLOGRAPHY

1. Das,Amit Kumar “Mutual Funds in India Performance and Disclosure Practices

2. Babasab Patil- “A Project Report on The Analysis And Comparative Study Of SBI and HDFC Mutual Fund.”
3. Mrinal Manish – “ Comparative Analysis of Mutual Funds with special reference to SBI Mutual Funds
4. Raghu Anand -“A Comparative Analysis on Various Mutual Fund Schemes of HDFC And SBI As An Investment
Option For Retail Investors In India”
5. Y. Maheswari “A Comparative study on performance of selected mutual funds in india
6. Dr. Rajesh Manikraoji Naik, M R Senapathy- “A Comparative Study On The Performance Of Mutual Funds
Sbi Mutual Funds V/S Others” -International Journal Of Advance Research In Science And Engineering, Vol. No.2,
Issue No.10, October 2013

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