Mutual fund portfolio performance in Bangladesh: a comparative analysis

Abstract

This internship report provides a comprehensive analysis of mutual fund portfolio performance in Bangladesh, focusing on a comparative evaluation of four mutual funds against the benchmark DSEX index. The study spans a three-year period (2022–2025) and employs quantitative methods, including return calculations, Sharpe ratios, Jensen’s alphas and paired t-tests, to assess fund performance. The key findings of the study are that professionally managed funds typically failed to beat the current risk-free rate (11.87% T-bill yield) and showed no statistically significant outperformance relative to the DSEX. Diversification benefits existed but were limited, and market volatility impacted returns significantly enough that, even in the cases where a fund outperformed the DSEX or risk-free rate, the low risk-adjusted returns challenge the utility of the fund. The report also details the internship experience at EBL Asset Management Limited (EBL AML), highlighting contributions such as financial analysis, lead generation, and miscellaneous operational improvements. Challenges included communication inefficiencies and outdated hardware. Recommendations for EBL AML include enhancing intern supervision, upgrading technology, and expanding marketing efforts. For investors, the findings suggest caution when investing in mutual funds during volatile market conditions, emphasizing the importance of risk-adjusted returns and diversification. The report underscores the need for fund managers to adopt more robust strategies to justify management fees and deliver consistent value.