A STUDY OF THE INTERRELATIONSHIP BETWEEN RETURN GENERATED BY MUTUAL FUND SCHEMES AND THEIR PERCENTAGE SECTOR HOLDINGS

In the past decade, Indian Mutual Fund industry has seen en enormous quantitative growth. It is generally believed that Mutual Fund Industry works as a shock absorber and if it fails to do so, it cannot be differentiated from other types of investments. The global economic meltdown which started in the last part of 2007 began affecting the Indian Financial Markets from around the middle quarter of 2008. By the end of the year 2008 and early 2009, the global financial crisis had spread its roots deep into the Indian Financial Markets. Thus it is evident that this financial crisis affected the Indian Mutual Fund Industry as well. In this context I have analysed the correlation and interrelation between the percentage return generated by 12 Equity Diversified mutual fund schemes and their sector holdings between the periods of December 2008 to December 2012. We have used Pearson’s Correlation and ANOVA for the study. Through the study we found that there is no significant correlation between the percentage return generated & percentage sector holdings of the studied sample of mutual funds.