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- Title
Stock Selection and Market Timing Performance of Mutual Fund Schemes by Market Cap in India: An Empirical Investigation.
- Authors
Bangada, Pooja
- Abstract
The study examines the market performance in terms of stock selection and market timing skills of fund managers before, during and after the Covid-19 pandemic, with reference to selected small, mid and large cap mutual fund schemes. The study further investigates the presence of small firm effect in the Indian context by testing if small capitalization schemes of a fund house exhibit better performance than its large cap schemes. Performance evaluation has been conducted using Jensen's differential model, Treynor-Mazuy model and Henriksson-Merton model. A majority of the fund managers were successful in stock selection by identifying the underpriced securities during the pre-Covid and post-Covid periods. However, a majority of the schemes exhibited perverse market timing skills during the post-Covid period, while there was no significant evidence of market timing skills during the pre-Covid and Covid periods. The study provides valuable insights on fund performance, which can help investors to make informed decisions, fund managers to revisit their performance, and regulators to ensure a better policy framework.
- Subjects
INDIA; MUTUAL funds; MARKET timing; MARKET capitalization; COVID-19 pandemic; STOCK funds; INVESTORS; SMALL business
- Publication
IUP Journal of Financial Risk Management, 2023, Vol 20, Issue 3, p5
- ISSN
0972-916X
- Publication type
Article