Mutual funds performance: an analysis of mutual funds’ return (IDLC AML) compared to the Market Return (DSEX)

Abstract

IDLC Asset Management Limited was established on November 2015, with the objective to be the most-preferred destination for investment knowledge, investment products and investment return in Bangladesh for both individuals and institutions. IDLC AML is a wholly owned subsidiary of IDLC Finance Limited which offers asset management services in forms of Mutual Funds and Alternative Investment vehicles focused on Private Equity and Venture Capital space. The report is focused on measuring financial performance of the two open-end mutual funds of IDLC Asset Management Limited based on the basis of weekly NAVs since these portfolios have been launched till now. Weekly Average Return, Annual Average Return, Standard Deviation, Beta, Treynor Ratio, Sharpe Ratio, Jensen’s Measure (Alpha), and Modigliani risk-adjusted performance (M2) have been calculated to measure the risk adjustment performance of the Mutual Funds, and also to compare them with the Market Index Return. It is found that both of the mutual funds of IDLC AML have been well diversified to reduce its risk. The growth oriented fund has performed better than balanced oriented fund in terms of total risk. Both the funds have been offering diversification and professional guide to the investors and making them help to save for a better future. Chapter-3 is the main and prime chapter of this report which shows the categories of mutual funds launched by IDLC AML, how they work and benefit the investors, their advantages, including the way how it would be possible to invest in a monthly basis known as SIP. It also shows the financial results, figures and tables which is found from the calculation using the raw data collected from the company sources. Chapter-4 covers the findings and recommendations of the report, which is another important part of the report. Finally, a conclusion has been provided for the improvement of the Mutual Funds of IDLC Asset Management Limited.