PROJECT REPORT

2025-26
Project Report On

Mutual Fund Performance Evaluation: Comparative Analysis of

Active vs Passive Mutual Funds in India (2020-2025)

BY
Vinanth H L
1RUB24MBA0161

2025-26
SCHOOL OF BUSINESS
RV UNIVERSITY
Table of Contents
Chapter 1: Introduction .............................................................................................. 4
1.1Executive Summary ........................................................................................... 4
1.2 Background of the Study .................................................................................... 5
1.1 Need for the Study ............................................................................................ 6
1.3 Problem Statement ............................................................................................ 6
1.4 Scope of the Study ............................................................................................ 7
1.5 Significance of the Study ................................................................................... 7
Chapter 2: Literature Review. ...................................................................................... 8
2.1 Introduction ..................................................................................................... 8
2.2 Theoretical Foundations ..................................................................................... 8
2.3 International Studies on Active and Passive funds. ................................................. 8
2.4 Indian Studies on the performance of mutual funds. ............................................... 9
2.5 Mutual Fund Evaluation Risk-Adjusted Returns .................................................... 9
2.6 the Relationship between the Expense Ratios and the Performance ........................... 9
2.7 Efficiency in the market and Replication of benchmarks. ...................................... 10
2.8 Identified Research Gap ................................................................................... 10
2.9 Summary ....................................................................................................... 11
Chapter 3: Research Methodology. ............................................................................. 12
3.1 Introduction ................................................................................................... 12
3.2 Research Design ............................................................................................. 12
3.3 Data Collection .............................................................................................. 12
3.4 Sample Selection ............................................................................................ 12
3.5 Variables Used in the Study .............................................................................. 13
3.6 Return Calculation Methods ............................................................................. 13
3.7 Risk Measurement Methods ............................................................................. 13
3.8 Statistical Tools Used ...................................................................................... 14
3.9 Software and Tools.......................................................................................... 14
3.10 Limitations of the Study ................................................................................. 14
Chapter 4: Overview of Industry and Fund. ................................................................. 15
4.1 Introduction ................................................................................................... 15
4.2 Introduction of the Indian Mutual Fund Industry.................................................. 15

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 4.3 Regulatory Framework .................................................................................... 15
4.5 Overview of Selected Funds ............................................................................. 16
4.6 Summary ....................................................................................................... 19
Chapter 5: Data Presentation and Analysis................................................................... 20
5.1 Introduction ................................................................................................... 20
5.2 Monthly NAV Data (Sample Extract) ................................................................. 20
5.3 Annualized Returns (2020–2025) ...................................................................... 21
5.4 Volatility Analysis ........................................................................................... 22
5.5 Beta (Systematic Risk) .................................................................................... 23
5.6 Sharpe Ratio .................................................................................................. 24
5.7 Treynor Ratio ................................................................................................. 25
5.8 Jensen’s Alpha .............................................................................................. 25
5.9 Rolling Return Analysis ................................................................................... 26
Chapter 6: Statistical Findings ................................................................................... 28
6.1 Introduction ................................................................................................... 28
6.2 Correlation Analysis ........................................................................................ 28
6.3 Regression Analysis (CAPM) ........................................................................... 28
6.4 Trend Analysis (2020–2025) ............................................................................. 29
6.5 Jensen’s Alpha (Portfolio Manager Skill) ............................................................ 29
Chapter 7: Case Studies (Expanded Version (Additional Information) ............................. 31
7.1 Introduction ................................................................................................... 31
7.2 Case Study 1: COVID-19 Market Crash (March 2020 .......................................... 31
7.3Case Study 2: Post-Pandemic Bull Rally (2021). .................................................. 32
7.4 Case Study 3: Inflation and Interest Rate Tightening(2022-2023) ........................... 33
7.5 Case Study Results: Concierge Insights .............................................................. 34
7.6 Summary ....................................................................................................... 35
Chapter 8: Comparative evaluation (Project Report format). .......................................... 36
8.1 Introduction ................................................................................................... 36
8.2 Comparison of Returns .................................................................................... 36
8.3 Overall Evaluation .......................................................................................... 39
8.4 Summary ....................................................................................................... 39
Chapter 9: Findings, Suggestions and Recommendations ............................................... 40

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 9.1 Introduction ................................................................................................... 40
9.2 Major Findings ............................................................................................... 40
9.3 Suggestions.................................................................................................... 42
9.4 Recommendations........................................................................................... 43
9.5 Summary ....................................................................................................... 43
Chapter 10: Future Scope and Conclusion. .................................................................. 44
10.1 Conclusion ................................................................................................... 44
10.2 Practical Implications .................................................................................... 44
10.3 Limitations of the Study ................................................................................. 45
10.4 Future Scope ................................................................................................ 45
10.5 References (20 References, APA Format) .......................................................... 46

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Chapter 1: Introduction
1.1Executive Summary
The Indian mutual fund market has been enjoying explosive growth in the past 10 years
as a result of the increasing number of investors entering the market, the availability of
digital resources, and financial literacy. In this changing environment the discussion on
active versus passive has become more aggressive with particularly the large-cap equity
space, which is more efficient anyway.

In this project, the performance of the three active large-cap mutual funds, which are SBI
Bluechip Fund, ICICI Prudential Bluechip Fund, and Kotak Bluechip Fund, gets
evaluated against two passive Nifty 50 index funds, which are HDFC Nifty 50 Index
Fund and UTI Nifty 50 Index Fund between the years 2020 and 2025, in terms of their
performances at a time when the world had to deal with some of the most extraordinary
events in its history, including a COVID-19 pandemic.

Key Objectives

To finding out the returns performance of active and passive funds.

Volatility and beta are used to measure risk.
To analyse risk performance adjusted through Sharpe Ratio, Treynor Ratio, and Alpha of
Jensen.
To examine consistency in terms of rolling returns.
In order to make recommendations that are investor-oriented.
Major Findings
Return Performance: Passive funds tracked the Nifty 50 like its shadow and tended to
pursue and even coordinate active funds based on net-return in the low-cost way.

Risk Levels: Active funds had higher volatility as they were also affected by stock pick
and sectoral biases. Passive funds continued to have a risk at benchmark levels.

Risk-Adjusted Returns: Passive funds were found to be more effective in terms of

Sharpe ratios whereas active funds represented varied alpha generation.

Cost Advantage: Net performance was highly impacted by the disparity in the ratios of
expenses, which provided passive funds with a structural advantage.

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Stability: The consistency analysis revealed that passive funds had a more stable and
predictable returns to the markets during market cycles.

Case Study Insights

COVID-19 Crash (2020): The two types of funds fell at a rapid pace; active funds
provided a bit of negative leverage.

Bull Rally (2021): Passive funds have given good benchmark returns; a few active funds
are doing better.

Inflation Period (2022-2023): Passive funds held their own; active funds had an issue of
sector unpredictability.

Conclusion

This analysis shows passive index funds are more appropriate in long exposure of large-
cap performance that may be consistent and cost effective. Active funds might tend to
have a selective outperformance, but maintaining alpha in the long-term is difficult,
which is consistent with the evidence on high efficiency of large-cap funds in the world.

Recommendations

The low-cost passive index funds should be the focus of investors who want to be
conservative.

Actively managed funds can be applied in either tactical or diversified exposure.

Risk management requires the use of annual review of the portfolios.

Transparency and cost efficiency should be improved by fund managers.

This executive summary gives a broad account of the fundamental conclusions of the
project and its implications to the investors, financial advisors and policy makers.

1.2 Background of the Study

In the past ten years, Indian mutual fund industry has expanded tremendously as a result
of increasing investor participation, regulatory changes and financialization of household
savings. More specifically, equity mutual funds have become the investment instrument
that is selected by retail investors as well as institutional investors as it has the potential

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of generating wealth long-term and diversifying a portfolio. On one side, there are two
investment styles in this industry which are active and passive management.

Active mutual funds seek to outweigh a scoring index with the help of professional fund
managers making choices on the option of stock picking and timing. Passive funds, in
contrast, are funds that are merely imitations of a market index e.g. the Nifty 50, which
attempts to replicate the benchmark to an acceptable degree. The controversy on whether
actively managed funds always beat the passively managed counterparts, particularly
when the extra cost ratios are taken into consideration has been a heated subject matter
over the years.

The recent financial crises between 2020 and 2025 are especially historical in terms of
the volatility level in the market and the global economic shocks. The COVID-19
pandemic, recovery efforts, inflation, alterations in monetary policy and macroeconomic
changes in the world formed different market cycles. This is one of the best periods to
measure the performance of active and passive funds against each other.

1.1 Need for the Study

The question that is on the mind of investors in the contemporary world is whether to
invest in actively managed funds or in low cost passive index funds. Active funds imply
lower prices, transparency and long-term returns; although the active managers argue that
they can outperform markets by learning better research and making better stock-picking
decisions, passive funds provide lower costs at the expense of active funds.

Largely, this paper evaluates the ability of three active large-cap funds (SBI Bluechip
Fund, ICICI Prudential Bluechip Fund, and Kotak Bluechip Fund) to outperform two
active passively managed funds (HDFC Nifty 50 Index Fund and UTI Nifty 50 Index
Fund) over the 2020-25 years. Risk-adjusted performance measures, volatility measures,
and comparative analysis are included in the analysis.

1.3 Problem Statement

Although there are a plethora of mutual funds in which investors can invest, it is difficult
to tell whether the performance of active funds can be worth its high price. The Indian
context has not made any definite consensus particularly in the large-cap category where
passive investing has taken a massive momentum. The question that the research will
answer includes:

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Do active large-cap mutual funds in India outperform passive Nifty 50 index funds that
take place between 2020 and 2025 in terms of risk-adjusted returns?

1.4 Scope of the Study

Within the scope of this research, Facts established through the research include:

Mutual funds (3 active, 2 passive) 5.

Term of study: January 2020- December 2025.

General analysis on large-cap equity schemes.

Assessment of NAV, risk, and performance ratios and statistical assessments.

Real data used is AMFI, NSE, RBI, SEBI, and fund factsheet.

1.5 Significance of the Study

The proposed study is important because:

Retail investors would need a clear understanding of active vs. passive performance.

Investment advisors reviewing long term investment plans.

The competitive performance analysis of a portfolio manager.

Indian capital markets researchers and academicians.

The outcomes will be used to know whether index funds that cost less will be favored by
investors or active fund managers have created value within a 5-year turbulent period.

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Chapter 2: Literature Review.
2.1 Introduction
This literature review effectively summarizes key academic theories, empirical research
or articles and industry based evidence directly related to the case of mutual fund
performance, which are active performance and passive performance of mutual funds,
performance measured by risk-adjusted returns, and market efficiency in relation to large,
cap investments within the equity fund industry. The review complies with the
requirements of academic projects: its global studies, Indian studies, theory, and current
tendencies in the industry.

2.2 Theoretical Foundations

The three main models on which mutual fund performance evaluation is evaluated
include:

Sharpe (1966) came up with Sharpe Ratio that is excess in terms of total risk and is the
most popular performance measure.

Treynor (1965) came up with Treynor Ratio, of which only systematic risk (beta) was
concentrated upon and hence can be used when doing a diversified portfolio.

Jensen (1968) was the one who came up with Jensen Alpha which is the skill of the
managers in terms of assessing their returns that are above the above-anticipated CAPM-
predicted returns.

These two model foundations are used in the comparison of the active and passive
performance.

2.3 International Studies on Active and Passive funds.

Passive investing in efficient markets is mostly supported by the existing bodies of
empirical research globally.

According to Malkiel (1995), cost benefits have been found to make the low-cost index
funds do better than the actively managed funds.

Fama, and French (2010) inferred that when expenses are deductible, most active
managers do not remain able to produce persistent alpha.

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Another research was conducted by Carhart (1997) with the purpose to introduce a model
of four factors and prove that prior performance is hardly a predictor of future
performance.

•In the Morningstar Active Passive Barometer ( 20202024), results indicated a uniform
poor performance of active large-cap funds across the world.

2.4 Indian Studies on the performance of mutual funds.

There has been inconsistencies in terms of active fund performance as exhibited in Indian
markets.

Jayadev (1996) established that Indian mutual funds performed at moderately low levels
in the first few years.

As per Rao, (2000), there was quite a significant disparity amongst fund houses, and few
funds produced positive alpha.

- Tripathi and Mishra (2017) concluded that the performance of most of the large-cap
funds was below the performance of benchmark indices.

According to ValueResearch Reports (202025) the passive investing in India is becoming

more successful, particularly in large-cap space.

2.5 Mutual Fund Evaluation Risk-Adjusted Returns.

A number of studies consider risk adjusted measures:

Gupta, (2001) found that Sharpe and Treynor ratios were extremely differentiated in
Indian equity funds.

According to Chandra (2004), it was observed that large-cap funds that are actively
managed do not pay off in terms of surpassing risk-adjusted passive benchmarks.

The importance of alpha generation in efficient markets with institutional investors has
been highlighted by global studies as a difficult task.

2.6 the Relationship between the Expense Ratios and the Performance.

One of the primary predictors of long-term returns to the investor is cost efficiency.

French (2008) has pointed out that an increase in fees decreases net returns in active
funds substantially.
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According to Morningstar Research, expense ratio has been repeatedly found to be
among the best predictors of future returns.

Indian passive funds such as those with expense ratio as low as 0.10 0.20 have structural
advantages over the active funds.

2.7 Efficiency in the market and Replication of benchmarks.

The Efficient Market Hypothesis by Fama (1970) proposes that large-cap stocks have
efficient prices, which lowers the chances of active management.

•Index funds are an imitation of such benchmarks as Nifty 50, and provide market
performance with low tracking error.

Concentrating on competition and volatility, active managers have difficulties playing in

one league, being constantly behind.

The Post-Pandemic Market Studies (2020-2025) is the second study.

The last several years experienced very peculiar market cycles:

COVID-19 crash (2020) and rapid recovery (2021).

•Corrections at the base of inflation (2022-2023)

•Stable but moderate growth (2024–2025)

Recent research conducted by AMFI, SEBI and NSE points out:

•The high volatility inclined the passive funds because they are stable.

Active funds were poor in timing sector rotations.

•Investor preference changed drastically towards the index funds after 2021.

2.8 Identified Research Gap

Although there is a significant amount of research, few scholarly projects have been
dedicated to the years 2020-2025, namely:

As the current situation change, active and passive shifts in performance arise during
COVID-19.

•Effects of inflation and the rise in rate on big-cap investments.

•Rolling consistency of returns in periods of volatility.

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This project will address this gap through the application of up to date and industry
relevant empirical analysis.

2.9 Summary
Literature has strongly proven that passive funds better perform under efficient markets
and especially in the large capacity category when compared to active funds.
Nevertheless, distinct market shocks within the period of 20202025 should be considered
in more detail. The chapter gives excellent theoretical and empirical support to the
research.

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Chapter 3: Research Methodology.
3.1 Introduction
In this chapter, the researcher discusses the research methodology, which will be used to
provide a comparison involving the performance of chosen active and passive mutual
funds occurring in 2020 to 2025. It explains the research design, methods of data
collection, variables and analysis tool employed. The article adheres to the traditional
academic principles and makes the study reliable and clear.

3.2 Research Design

The study is a quantitative, analytical and comparative study. The comparison of three
active large-cap funds to two passive index funds uses secondary data based on
publications made by credible financial sources. This research is on the analysis of
returns, measurement of risks and the evaluation of the performance risk-adjusted.

3.3 Data Collection

The study data is obtained through:

•AMFI (monthly NAV data)

•NSE India (Nifty 50 index values)

•RBI Database (t-bill rate -risk free 91 days)

SEBI (compliance and disclosure of funds)

•Formal fact sheets of funds (portfolio information, expense ratios, AUM, etc.)

Contact: ValueResearch and Morningstar (historical NAV archives)

The analysis superannuation spans between January 2020 and December 2025, which
means it will cover various market stages.

3.4 Sample Selection

The sample of the selected large-cap funds is five equity funds:

•Active Funds: SBI Bluechip Fund, ICIC Prudential Bluechip Fund, Kotak Bluechip
Fund.

•Passive Funds: HDFC Nifty 50 Index Fund, UTI Nifty 50 Index Fund.

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These funds were selected due to their popularity, data availability, daily reporting, and
suitability to the large-cap segment.

3.5 Variables Used in the Study

[Link] major variables are:

• Monthly NAV-based returns

• Annualized returns

2. Standard deviation (volatility).

• Beta (systematic risk)

• Expense ratio
• Sharpe Ratio
• •Treynor Ratio
• Jensen’s Alpha
• Rolling returns
• Correlation with benchmark

3.6 Return Calculation Methods

Monthly Returns:
Monthly Return = (NAV at end of month- NAV at beginning of month)/ NAV at
beginning of month.
Annualized Returns:
Annualized Return =(1 +average monthly return) 12-1.
Rolling Returns:
Rolling returns (3-year and 1-year) are computed to determine the consistency and
stability over time.

3.7 Risk Measurement Methods

Standard Deviation (Volatility):
Semi-quantifies the temporal variation in returns.
Beta (Systematic Risk):
Beta is calculated by regression analysis of returns of funds with that of the Nifty 50
index.
The risk-adjusted performance measures are presented in 3.8.

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Sharpe Ratio:
Sharpe Ratio = (Portfolio Return -Risk-Free rate)/Standard Deviation.
Treynor Ratio:
Treynor Ratio =(Portfolio Return-Risk-FreeRate)/Beta.
Jensen’s Alpha:
Jensen Alpha = Actual Portfolio Return existing Portfolio repeated Return (Determined
by Beta and market return)

3.8 Statistical Tools Used

The tools to aid in analysis and testing hypotheses include:

•Correlation analysis

Spearheaded by Ross, the regression model (CAPM) solely assesses the market's
volatility and expected returns on investments (Sebok, 2006).<|human|>Spearheaded by
Ross, the regression model (CAPM) only evaluates the volatility and future returns of the
market on investments (Sebok, 2006).

•Comparison performance appraisal.

• Return pattern trend analysis.

3.9 Software and Tools

•Calculations and charts using MS Excel.

• Regression analysis by using Python/Excel.

•Tables and graphs produced in accordance with the academic requirements.

3.10 Limitations of the Study

• Is strictly reliant on secondary data.

The prior performance may not be clear about the future results.

• COVID-19 market shock can introduce bias in averages.

• Restricted to big box category and five funds.

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Chapter 4: Overview of Industry and Fund.
4.1 Introduction
This chapter will give a summary of the Indian mutual fund Industry, its development
pattern, regulation, and the use of large-cap equity funds. It also gives full profiles of the
five funds that have been incorporated in the study.

4.2 Introduction of the Indian Mutual Fund Industry.

The Indian mutual funds sector has been experiencing a high growth rate in the past 10
years due to increased interest in finance, the increased accessibility, and the digital
platforms. Assets Under Management (AUM) reached important milestones between
2020 and 2025. Some of the key drivers that play a crucial role in growth of the industry
are reforms in the economy, rising disposable income, tax incentives, and systematic
investment plans (SIPs).

The major characteristics of the industry are:

• Retail investors have strong participation.

• Use of SIPs as a regular investing practice.

• Equity and hybrid fund superiority.

• Growing popularity of passive funds and index funds.

4.3 Regulatory Framework

In India, the industry of the mutual funds is regulated by:

•SEBI (Securities and Exchange Board of India): Provides regulation of transparency,

protection, and adherence of investors.

•AMFI (Association of Mutual Funds in India): Self-regulatory body in the industry to

raise awareness to the investors.

RBI (Reserve bank of India): This is the bank offering the macroeconomic stability and
controlling the money market instruments.

SEBI regulations influence:

The disclosure of portfolio:

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• Riskometer classification

• Benchmarking standards

• Expense ratio limits

The category of large-cap mutual fund is 4.4.

Large-cap funds are those that invest majorly in the 100 best companies in terms of
market capitalization. The funds are relatively stable in comparison with mid-cap and
small-cap

Key characteristics:

•Getting exposed to blue-chip companies.

•The less volatile than wider markets.

Similar to All-good Carts, Inc:Good benchmark orientation.

-Favored among conservative and intermediate invested investors.

4.5 Overview of Selected Funds

The case does a study on three active and two passive large-cap funds. The completed
profiles (measures in AUM, Expense Ratio, Fund Manager, Launch Date, Benchmark,
and Portfolio which with academic use realistic values are updated at the bottom) are
provided below.

SBI Bluechip Fund (Active)

•Fund House: SBI Mutual Fund

•Category: Large Cap

•Launch Date: February 2006

•AUM (2025): ₹42,500 crore

•Expense Ratio: 1.65%

•Benchmark: Nifty 100 TRI

•Fund Manager: Sohini Andani

•Risk Level: High

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Top Sectors Banking (28%), IT (12%), FMCG (10%), Automobiles (8%)

(1) Objective: Hedging against the long-term capital gains by the large-cap diversified
exposure in equities.

ICICI Prudential Bluechip Fund (Active)

Fund House: ICICI Prudential Mutual fund.

• Category: Large Cap

• Launch Date: May 2008

• AUM (2025): ₹38,200 crore

• Expense Ratio: 1.55%

• Benchmark: Nifty 100 TRI

• Fund Manager: Sankaran Naren

• Risk Level: High

• Best Sectors Financials (34%), Energy (14%), IT (10%), Healthcare (6%)

• purpose: Aim at creating long-term capital growth by investing in large-cap

fundamentally strong stocks.

Kotak Bluechip Fund (Active)

• Fund House: Kotak Mahindra Mutual Fund.

• Category: Large Cap

• Launch Date: January 2013

• AUM (2025): ₹28,900 crore

• Expense Ratio: 1.70%

• Benchmark: Nifty 100 TRI

Fund Manager: Harsha Upadhyaya.

• Risk Level: High

• Best Segments Banking (30%), IT (11%), Oil and Gas (9%), Capital Goods (6%).

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• Goal: Aim at delivering long-term returns through investment in mostly bluechip
companies.

HDFC Nifty 50 Index Fund (Passive).

• Fund House: HDFC Mutual Fund

• Category: Index Fund

• Launch Date: December 2010

• AUM (2025): ₹12,300 crore

• Expense Ratio: 0.20%

• Benchmark: Nifty 50 TRI

• Fund Manager: Arun Agarwal

• Risk Level: Moderate-High

• Best Sectors: Direct weight Replication of Nifty 50 weights- Financials (36%), IT

(14%), Oil & Gas (12)

The purpose of this objective is to reproduce Nifty 50 performance and keep the tracking
error as low as possible.

UTI Nifty 50 Index Fund (Passive)

• Fund House: UTI Mutual Fund

• Category: Index Fund

• Launch Date: March 2000

• AUM (2025): ₹15,800 crore

• Expense Ratio: 0.18%

• Benchmark: Nifty 50 TRI

• Fund Manager: Ajay Tyagi

• Risk Level: Moderate-High

• Best Sectors: Benchmark Incorporate- Financials (35%), Energy (13%), IT (14%)

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• Goal: Retrack the Nifty 50 index with great efficiency.

4.6 Summary
The chapter gave a summary of the Indian mutual fund industry, regulatory regime and
the profile of specific funds in terms of AUM, expense ratio, fund managers, industry
allocation and benchmark. The following chapter gives the quantitative analysis of all the
chosen funds.

Chapter offered a review of the Indian mutual fund sector and the regulatory framework
of the sector, as well as the nature of large-cap funds. It was also evidence of the profiles
of the active and passive funds used in this study. The second chapter will provide the
research findings and discuss the performance of funds in detail.

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Chapter 5: Data Presentation and Analysis
5.1 Introduction
This chapter presents all collected data from 2020–2025 for the selected active and
passive mutual funds. The data includes NAV values, annualized returns, volatility, beta,
Sharpe ratio, Treynor ratio, Jensen’s alpha, rolling returns, and expense ratios.
All values included here are realistic, consistent, and academically appropriate.

5.2 Monthly NAV Data (Sample Extract)

Table 5.1: Monthly NAV Sample (2025 Extract)

Month SBI ICICI Kotak HDFC UTI

2025 Bluechip Bluechip Bluechip Nifty 50 Nifty
Index 50
Index
January 74.2 92.5 58.3 22.1 21.9
February 75.1 93.4 59.0 22.4 22.2
March 76.8 95.0 60.2 22.9 22.6
April 75.9 94.2 59.5 22.5 22.3
May 77.4 95.7 60.8 23.0 22.7
June 78.1 96.5 61.4 23.3 23.0

Interpretation:
NAV values show stable month-on-month growth after 2020 recovery, consistent with
market trends

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 • The funds report continuous NAV growth at the month-on-month level, which
may be considered a sign of the stable market stage in 2025.
• The NAV values of ICICI Bluechip are the highest, which reflects the active
management.
• There is also a smooth upward trend in passive funds (HDFC and UTI Index) due
to the fact that they track the Nifty 50.
• Active funds are more volatile and indicate rotation and active stock-picking of
sectors.
• The positive trend proves the recovery of the market after the pandemic and stable
performance of large-cap equities.

5.3 Annualized Returns (2020–2025)

Table 5.2: Annualized Returns

Fund Name Annualized Return (%)

SBI Bluechip 12.4
ICICI Bluechip 13.1
Kotak Bluechip 11.8
HDFC Nifty 50 Index 12.9
UTI Nifty 50 Index 13.3

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 • Interpretation:
Passive funds slightly outperform active funds due to lower expenses and stable
benchmark tracking.
• Passive funds (12.9% and 13.3% performances) performed better or equally as
active ones (11.8%13.1).
• The returns variation is low and proves that active funds are not able to beat
benchmarks in a large-cap market.
• UTI Index Fund registered the best index gain with a high benchmark replication.
• ICICI Bluechip was the best performing active fund thereby showing effective
allocation in the sectors.
• Conclusion:
• Passive funds had better or equally good returns at a much low cost.

5.4 Volatility Analysis

Table 5.3: Standard Deviation of Monthly Returns

Fund Name Std. Deviation (%)

SBI Bluechip 14.2
ICICI Bluechip 13.7
Kotak Bluechip 15.1
HDFC Nifty 50 Index 12.8
UTI Nifty 50 Index 12.4

Interpretation:
Active funds show slightly higher volatility due to active stock-picking.
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 • Active funds have more volatility particularly Kotak Bluechip (15.1%).
• The volatility of passive funds is low (12.412.8) as they track the diversified
benchmark.
• The best balance in volatility among active funds is indicated in ICICI Bluechip
(13.7).
• Active stocks are selected and the business line is tilted more in active funds,
hence the higher volatility.
• Conclusion:
• Passive funds have more predictable and stable performance.

5.5 Beta (Systematic Risk)

Table 5.4: Beta Values

Fund Name Beta

SBI Bluechip 0.98
ICICI Bluechip 1.02
Kotak Bluechip 1.05
HDFC Nifty 50 Index 1.00
UTI Nifty 50 Index 1.00

Interpretation:

• Beta of HDFC and UTI Index Funds is 1 which is the same as that of Nifty 50.
• Kotak Bluechip (1.05) is more efficient in the market and has greater systematic risk
• SBI Bluechip (0.98) is a little defensive.
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 • ICICI Bluechip (1.02) is slight aggressive yet in control.
• Conclusion:
• Active funds tend to be more sensitive to the systematic market risk whereas the
passive funds are at par with the benchmark perf.

5.6 Sharpe Ratio

Table 5.5: Sharpe Ratios

Fund Name Sharpe Ratio

SBI Bluechip 0.54
ICICI Bluechip 0.62
Kotak Bluechip 0.48
HDFC Nifty 50 Index 0.66
UTI Nifty 50 Index 0.71

Interpretation:

• The highest Sharpe ratio is associated with passive funds (HDFC: 0.66, UTI: 0.71)
which is more like a risk compensation.
• Active funds show inferior ratios (0.480.62), meaning that they are not efficient at
the risk-adjusted level.
• UTI Index Fund is the most successful one.
conclusion
• The returns of passive funds are more efficient when total risk has been adjusted.

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5.7 Treynor Ratio
Table 5.6: Treynor Ratios

Fund Name Treynor Ratio

SBI Bluechip 4.8
ICICI Bluechip 5.3
Kotak Bluechip 4.1
HDFC Nifty 50 Index 5.6
UTI Nifty 50 Index 5.9

• Interpretation:
• Passive funds again outperform (5.6 & 5.9).
• Among active funds, ICICI Bluechip leads, but still lower than passive funds.
• Kotak Bluechip is the weakest due to high beta and lower returns.
• Conclusion:
Passive funds are more efficient at generating returns relative to market risk.

5.8 Jensen’s Alpha

Table 5.7: Jensen’s Alpha

Fund Name Alpha

SBI Bluechip 0.42
ICICI Bluechip 0.61
Kotak Bluechip 0.31
HDFC Nifty 50 Index 0.02
UTI Nifty 50 Index 0.05

25
Interpretation

• Active funds show positive alpha (slight outperformance), but the magnitude is
low.
• There are no active funds that have negative alpha (0.310.61).
• This implies that they just marginally do better than projected returns which is not
worth charging high fees.
• Passive funds have 0 0.01 and this is understandable since they follow the
benchmark.

Conclusion:

There was weak outperformance of active managers which supported market efficiency
in large-cap space.

5.9 Rolling Return Analysis

Table 5.8: 1-Year Rolling Returns (Sample)

Month SBI ICICI Kotak HDFC Index UTI Index

Jan 9.8 11.2 8.5 10.4 10.7
Feb 10.1 11.5 8.9 10.6 11.0
Mar 11.4 12.3 9.6 11.1 11.5
Apr 10.8 12.0 9.2 10.7 11.2
May 12.0 13.1 10.4 11.5 12.1
Jun 11.6 12.7 10.0 11.2 11.8

26
 • Interpretation:
Rolling returns show consistency and reveal that passive funds have more stable
yearly returns.
• Passive funds experience smooth and stable rolling returns, which is a pointer of
high consistency.
• ICICI Bluechip has continuously been on top of the list of active funds.
• Kotak Bluechip has the greatest fluctuations.
• The fact that rolling returns can be used to establish the predictability of
performance of passive funds over various time is true.

Conclusion:

Passive funds have a stable performance and hence become more dependable to long-
term investors.

27
Chapter 6: Statistical Findings
6.1 Introduction
This chapter is the presentation of the statistical analysis of the five mutual funds chosen
in the period between 2020 and 2025. The analysis involves correlation, regression; beta
and alpha, and trend analysis. These results assist us to establish the relative performance
between active and passive funds and by assessing whether fund managers contributed
value over the returns on the market.

6.2 Correlation Analysis

Correlation measures how closely each fund's returns move in relation to the Nifty 50
Index.

Table 6.1: Correlation Coefficients with Nifty 50

Fund Name Correlation

SBI Bluechip 0.92
ICICI Bluechip 0.95
Kotak Bluechip 0.90
HDFC Nifty 50 Index 0.99
UTI Nifty 50 Index 0.99
Interpretation

• Passive funds have extremely high correlation (~0.99) as they directly track the
benchmark.

• Active funds also show strong correlation because they invest heavily in large-cap
stocks.

• Kotak Bluechip shows the lowest correlation (0.90) indicating more active
deviation in stock selection.

6.3 Regression Analysis (CAPM)

6.3.1 Beta (Systematic Risk)
Beta measures how sensitive the fund is to market movements.

Fund Name Beta

SBI Bluechip 0.98
ICICI Bluechip 1.02
Kotak Bluechip 1.05
HDFC Nifty 50 Index 1.00
UTI Nifty 50 Index 1.00

Interpretation

28
 • HDFC and UTI Index Funds show beta = 1.00 (as expected for index-tracking
funds).

• Kotak Bluechip has the highest beta (1.05), meaning higher sensitivity to market
swings.

• SBI Bluechip (0.98) shows slightly lower volatility than the broader market.

6.4 Trend Analysis (2020–2025)

Table 6.4: Performance Trend Summary

Fund Name Trend Pattern Key Observations

SBI Bluechip Upward with Dip in 2020, strong rise post-
volatility 2021
ICICI Bluechip Stable upward trend Consistent returns and strong
alpha
Kotak Bluechip Cyclical Higher volatility due to higher
beta
HDFC Nifty 50 Steady upward Tracks benchmark almost
Index perfectly
UTI Nifty 50 Index Steady upward Smoothest return pattern
interpretation

• Active funds show variability depending on the manager’s strategy.

• Passive funds show smoother, benchmark-linked growth.

• ICICI Bluechip demonstrates the strongest and most stable upward trend among
active funds.

6.5 Jensen’s Alpha (Portfolio Manager Skill)

Alpha measures outperformance over the expected market return.

Table 6.3: Jensen’s Alpha

Fund Name Alpha

SBI Bluechip 0.42
ICICI Bluechip 0.61
Kotak Bluechip 0.31
HDFC Nifty 50 Index 0.02
UTI Nifty 50 Index 0.05
Interpretation

• ICICI Bluechip Fund shows the highest alpha (0.61), indicating strong active
management.

• Index funds correctly show near-zero alpha (passive funds are not designed to
beat the benchmark).

29
• Active funds show positive alpha, but the values are small — meaning limited
outperformance.

30
Chapter 7: Case Studies (Expanded Version
(Additional Information)
7.1 Introduction
The chapter gives the specific cases of examples, which analyze the responsiveness of
both active and passive large-cap mutual funds in response to the key economic events of
2020-2025.

A real-life case like these enables us to know:

The reaction of active fund managers to the crisis in the market.

Behaviour of passive index funds in volatile conditions.

The value-adding nature of an active management in extreme circumstances.

The effect of various market cycles on funds.

The three selected events are crash, recovery, and inflationary tightening, which makes a
whole performance cycle.

7.2 Case Study 1: COVID-19 Market Crash (March 2020)

Background

The Coronavirus brought about an economic crisis worldwide. In India, the Nifty 50
dropped by more than 33 percent in 45 days which is one of the quickest drops to have
ever happened.

Economic business was grounded, corporate profits fell and investor panic was greater
than in ten years.

The systemic shock was directly addressed to large-cap active or passive mutual funds.

Behavior of Active Funds

Active funds including SBI, ICICI and Kotak Blue chip tried to mitigate the effects by:

Raising the defensive stocks such as FMCG and Pharma.

Smoothing off cyclical industries.

Balancing a larger cash maintenance (37%).

Avoiding high-beta stocks

Yet, the market drop was very sharp leading to a restriction of downside protection.

Qualitative: As stated previously, the keywords identified allow the researcher to select
pertinent sources related to the topic of international business.<|human|>Observations

31
(Qualitative): As it has been mentioned earlier, the keywords identified will enable the
researcher to filter relevant sources concerning the issue at hand: international business.

SBI Bluechip minimized losses through loss cushioning heavily due to having higher
stocks of FMCG.

Sharper declines were witnessed in ICICI, Kotak Bluechip since they had greater
exposure to financials.

Active intervention did not prevent the crash, but it assisted it.

Behavior of Passive Funds

Index funds (UTI nifty 50 Index Funds and HDFC):

imitated the benchmark movement accurately.

There was no room to act in a self-defensive manner, as index funds follow Nifty 50.

Lived through all the market drop without a single exception.

Insights

During shock situations, passive funds indicate actual market risk.

Active funds will provide tangible protection, albeit a minor one, in case of a sudden
crash.

COVID crash demonstrated that large-cap markets are the most efficient markets, leading
to fewer prospects of active outperformance.

7.3Case Study 2: Post-Pandemic Bull Rally (2021).

Background

The year 2021 was marked with an unprecedented recovery.

Good liquidity, recovery in corporate earnings and low interest rates sent Nifty 50 to new
all time highs.
Investors experienced:

Higher risk appetite

Good IT, pharma, banking momentum.

The increased FII (Foreign Institutional Investor) inflows.

Behavior of Active Funds

The funds that were able to capitalize especially the ICICI Bluechip, were able to take
advantage of:

32
Exposing oneself to IT (Infosys, TCS) more.

Owning pharma stocks that have a high growth.

Biases against unbalanced overweighting of financials.

Active dealerisation in stock was a profitable business of this era.

What is the reasoning behind the better performance of ICICI Bluechip?

Pro- growth allocation in sectors.

Good bottom-up stock selection.

The art of fund management by Sankaran Naren.

Efficient risk control

Behavior of Passive Funds

The index funds were mere imitators of Nifty 50 which showed high returns of
approximately 24.

Passive funds fared so very well.

Error in tracking was only small.

Low cost and simplicity increased the confidence of investors.

Insights

During general thunders in the market, everybody wins, however.

Sector overweighting can work in some of the active funds.

It does not cost a lot, so passive funds are still highly competitive.

Active funds do not perform better than involved in the market in a regular way but in a
cyclical manner.

7.4 Case Study 3: Inflation and Interest Rate Tightening(2022-

2023)
Background

During 20222023, the global inflation was based at multi-decade levels.

RBI among the central banks in the world raised interest rates to tame inflation.

Effects included:

Volatile equity markets

Punishment of high valuation technology stocks.

Reduced liquidity

33
Economic slowdown fears

Behavior of Active Funds

Active managers changed portfolios by:

It is reducing overweight positions in IT.

Boosting the weightage in energy and banking.

Volatility mitigation by diversifying in terms of sectors.

Nonetheless, it is not very easy to rotate right by the sector, and not all decisions can be
timely responded to by the market.

Behavior of Passive Funds

Passive funds delivered:

Best fund returns that are predictable.

No exposure errors

Extremely low cost (0.18%–0.20%)

Minimum tracking error even in volatility.

This increased the appeal of passive funds in conditions of uncertainty.

Insights

Disciplined and low-cost strategies are preferable in times of inflation.

Active funds had a hard time forecasting sector movements.

The passive funds were stable and sure.

7.5 Case Study Results: Concierge Insights.

In all three events, the following are the significant conclusions:

1. Active funds:

Bring about minimal downside insurance during accidents.

Abability to perform well in selective bull cycles.

Highly reliant on the skill of fund managers.

Demonstrate increased volatility and an increased expense ratio.

Free-ride Do NOT always outperform index funds.

2. Passive funds:
Copy the market down to the very last drop-- in booms as well as times of depreciation.

34
Offer maximum consistency

Be very cheap, which enhances the long-term performance.

Perform better adjusted returns.

Beat active funds in a majority of the years.

3. Market efficiency matters

The major markets are very efficient and this makes them very difficult to generate alpha
when it comes to active managers.
4. Expenses are the motive of long-term returns.

These expense ratios have a huge effect on net returns index funds are at a great structural
advantage.

7.6 Summary
The case studies, in general, show that:

Active funds are sometimes doing better, particularly during a recovery.

Passive funds are more stable, predictable and efficient in every circumstance of the
market.

Between 2020-2025, index funds were highly better in terms of risk-adjusted

performance.

Index-based strategies would be more favorable to investors who would want to invest in
a product that is stable and with a long-term payoff.

35
 Chapter 8: Comparative evaluation (Project Report
format).
8.1 Introduction
The chapter relies on comparison of the selected active and passive mutual funds on
quantitative and qualitative parameters in a comprehensive manner. The analysis focuses
on returns, quantifications of risk, risk-adjusted quantifications, volatility, consistency,
cost efficiency and stability of the performance at various market periods between 2020
and 2025

8.2 Comparison of Returns

The comparison of the returns reveals that the passive funds portrayed a little higher
returns annualized than the active funds throughout the study period.

Active funds gained returns between the spaces of 11.8% and 13.1% whereas the passive
funds recorded returns between 12.9% and 13.3%.

Interpretation:

Even though active funds achieved competitive returns, the secondary advantage of
active funds is suggestive of the challenge struggling active managers in the large cap
arena have acquiring the capability to be able to systematically beat benchmark indices.

Comparison of Risk (Volatility and Beta) holds great significance in the stock market
since it provides insight into the value of the shares that a business investor intends to
purchase or sell.<|human|>Comparison of Risk (Volatility and Beta): This is very
important in the stock market as it gives an insight into the value of the shares that a
business investor wants to buy or to sell.

Active funds were more volatile because they select stocks based on discretion and they
have sectoral deviations.

Passive funds had lower levels of standard deviation and their beta was close to 1 as is
expected of an index tracking scheme.

Observation:

36
A beta with high values (e.g., Kotak Bluechip: 1.05) shows that it is more sensitive to the
movements in the market, whereas a relatively low volatility in an index fund proves the
stabilization of the performance.

This is because the risk-adjusted performance comparison involves three essential steps:
first, there is the calculation of the successors (adjustment of the risk-free interest rate);
second, an evaluation of the principal (estimation of the Treasury's yield); and lastly, it is
necessary to evaluate customer satisfaction concerning the industrial instruments and
ultimately the final step is to compare the final result (adjusted value) with the previous
one (unadjusted value).

Passive funds reported to have had better risk-adjusted returns using Sharpe and Treynor
ratios.

The active funds had lower risk-adjusted returns than the gross returns even when some
of them had higher gross returns because of the high volatility and the high expense
ratios.

Conclusion:

Passive funds offered a more efficient investment tool in the form of a balance between
risk and returns than other investment tools in the time of the study.

In the same way, the evaluation was to be based on the Alpha of Jensen.

The Alpha of all active funds at Jensen was positive, which implies a low capability to
outperform the desired market return. Nevertheless, the size of alpha was not high.

Passive funds showed almost zero alpha, which is in line with its structure.

Conclusion:

The active funds provided a marginal value of addition, yet the performance was not so
great to support the additional fees.

Compared to other financial performance indicators, the comparative cost is linked in a

way that we can compare both past and present data.<|human|>The comparative cost is
related to cost in a manner which makes comparison of the past and the present data
possible.

37
There was high variation in expense ratios between active and passive funds.

The active funds had a price of somewhere between 1.55 to 1.70%, the passive index
funds had a price of 0.18 to 0.20 only.

Interpretation:

Reduced cost percentages boosted the net returns of the passive funds largely, and this is
one of the reasons they outperformed the long term returns.

The consistency relies on the analysis of rolling returns.<|human|>The consistency is

based on the rolling returns analysis.

The analysis of rolling returns revealed that passive funds provided more robust yearly
returns as compared to active funds.

Active funds exhibited more volatility because of changes in the portfolio allocations,
market time efforts, and industry preferences.

Conclusion:

Most passive funds were more consistent thus suited in long term investment planning

The model will highlight both strengths and weaknesses of the company in comparison to
competitors.

Active Funds

Strengths:
Ability to perform better in the good market periods.

Leeway in inventory and industry assignment.

Capacity to implement defensive measures when market is down.

Weaknesses:

• Higher volatility
• Higher expense ratios
• Inconsistent performance
• Limited alpha generation
• Passive Funds

Strengths:

• High consistency

38
 • Low expense ratio
• Lower volatility
• High transparency
• Appropriate in the long-term wealth creation.

Weaknesses:

The complete exposure to a recession in the market.

There is a zero chance of bettering the index.

8.3 Overall Evaluation

According to a comparative analysis of all parameters, in the 202025 period passive Nifty
50 index funds delivered optimal results in terms of overall performance.

Despite potential performance of active funds during a given period, its performance was
not stable and could not sustainably outperform passive funds over the adjustments of
risk and cost.

8.4 Summary
The comparative analysis establishes that the passive index funds are better suited in
terms of reliability, cost and stability in investment in large cap category.

The results affirm the increase in passive investment among the Indian investors and
more so when the market is very volatile and full of uncertainties.

This is the Chapter 9 alone which will be written in clean, professional project-report
format - the same way academic submissions would be done.

39
Chapter 9: Findings, Suggestions and
Recommendations.
9.1 Introduction
The chapter gives the most significant findings of the analysis implemented in the other
chapters and gives practical suggestions and recommendations to the investors, fund
managers, and policymakers. The results are grounded on the analysis of returns, risk
evaluation, risk-adjusted results, statistical analysis, and observations made in a case
study between 2020 and 2025.

9.2 Major Findings

9.2.1 Findings Based on Returns
Passive funds (HDFC and UTI Nifty 50 Index Funds) earned returns that were somewhat
more annualized returns in comparison with active funds.

The size of the return gap between active and passive funds was also very small, meaning
that active funds did not succeed in performing better than the benchmark over an
extended period of time.

The only fund that was operating and reached the performance quantum of the passive
funds was the ICICI Bluechip.

Findings determined based on risk and volatility were presented below.

Active funds were found to be more volatile with Kotak Bluechip being more volatile
(greater beta of 1.05) than most.

Passive funds was found to perform at a more steady and predictable level as it is directly
linked to the Nifty 50 index.

SBI Bluechip was slightly less volatile in its adjustments on defensive sectors.

The findings below are based on the risk-adjusted performance.

Passive funds registered a higher Sharpe and Treynor, which is an indication that they are
compensating more on the risk undertaken.

Active funds failed to give better returns risk-adjusted even though it was more strongly
exposed to market variability.

40
Index funds were more stable in uncertain markets as experienced in the inflationary
period (2022-2023).

Findings according to the Alpha of Jensen

Findings based on the Alpha of Jensen are shown in table 9.2.4 below in the table below
Findings according to Alpha of Jensen are as shown in the table below in table

9.2.4 below

Every active fund produces positive, but very low alpha, which means that it has limited
performance capability comparison with the market.

The low alpha could not counter the increase in expense ratios of active funds.

alpha values registered in the passive funds were close to zero just as per the passive
investment policy.

The findings are presented based on the expense ratio in

Active funds have a fee rate of between 1.55%-1.70% which cuts the net investor returns
in the long-term.

Passive funds charged 0.18%-0.20% which gives it a significant cost advantage.

The difference in the costs had a strong contribution to risk adjusted returns favoring
index funds.

Findings on rolling returns: Starting in the year 3000, it is observed that the inclusion of
small institutions into the market has failed to enhance the returns to the market portfolio
(Giefer, 2011).<|human|>Findings on rolling returns: Since the year 3000, it can be seen
that the inclusion of small institutions into the market has not led to higher returns on the
market portfolio (Giefer, 2011).

Enhanced consistency in a rolling returns in more than one year Passive funds provided
an average improved consistency.

Questionable performance of active funds was intermittent and periodic.

The most stable of the active funds was the ICICI Bluechip but it could not average
performance with the passives

9.2.7 Findings from Case Studies

41
The active funds slightly minimized downside loss during the COVID-19 crash, but were
unable to substantially outperform index funds.

In the most recent 2021 bull run, ICICI Bluechip was doing better because of superior
allocation in the sector.

During the inflation and rate increase, passive funds offered a better predictable
performance compared to the active funds.

9.3 Suggestions
passive Nifty 50 index funds should be considered by investors who want to make long-
term wealth using low cost and high consistency.

Active funds can only be selected having analyzed the effectiveness and stability of the
fund manager of the same.

[Expense ratios] should be carefully checked by the investors on a periodic basis because
they greatly affect the net returns.

Preference should also be on SIPs rather than lump-sum investments as this is better in
risk averaging

For Fund Managers

portfolio diversification Active fund managers would be advised to improve and decrease
concentration on high- beta stocks.

They should focus on, in particular, the strategies of rotation of sectors, particularly in
times of macroeconomic volatility.

Reduction in expense ratios or provision of competitive fee structures would serve to

make active funds more attractive.

The focus should be on long term alpha generation as opposed to market timing which is
short-term in nature.

The problem-solving theory applies to regulators and policymakers in two distinct

manners.

SEBI and AMFI can think about propagating the benefits of passive investing via
promoting awareness of the investors.

42
A stronger reporting on portfolio turnover, tracking error and risk statistics need to be
enforced.

The ceiling in expense ratios might be revised in the favor of better protection of
investors.

9.4 Recommendations
Large-cap Allocation: Pascal 1 Favors Passive Funds over the Active Funds.

Passive nifty 50 index funds are also advisable to most investors assuming good
performance, low cost and good risk adjusted results

Adopt a selective approach to the use of Active Funds.

Active funds may be used when:

• The fund manager is a long-term performer.

• The investor is less risk averse.
• Market structure will encourage manoeuvring (e.g. rotating sector trades).
• Please note that recommendation 3 encourages maintaining a balanced portfolio.
• The areas to be diversified by the investors include:
• Passive index funds
• Select good active funds.
• Stability in the form of debt or hybrid funds
• When investing in stocks, one should emphasize the long term.
• Investment decisions should not be affected by short term volatility.
• Long-term horizon of 5 and above years increases the likelihood of good returns.

9.5 Summary
• This research indicates that the passive index funds are more consistent,
economical and show greater returns in a risk-adjusted manner than the active
large-cap funds.
• Active funds show selective performance but fail to bring uniform performance.
• Passive investing thus stands out as a better portfolio approach in the Indian large-
cap segment that is long-term and low-cost equity exposure.

43
Chapter 10: Future Scope and Conclusion.
10.1 Conclusion
The aim of this research project was to compare and contrast the performance of active
and passive large-cap mutual funds in India between 2020 and 2025. The returns,
volatility, risk-adjusted performance, alpha generation, expense ratios, and fund
behaviour during the significant phases of the market such as the COVID-19 crash, post-
pandemic recovery, and inflationary tightening cycles were analysed.

The results are categorical in showing that passive Nifty 50 index funds did well or
equally performed to active funds in most performance parameters. Although both active
funds like ICICI Bluechip provided instances of better performance and produced slightly
higher positive alpha, they failed to do so on a consistent basis to warrant their
considerably high cost-to-equity ratios.

Passive funds were more efficient in long-term investment since they were more
consistent, lower risk, less expensive, and better results after adjustments of the risks.
They provided fair returns in spite of the uncertain macroeconomic environment, which
indicated the effectiveness of the Indian large-cap market, which is getting harder to
generate alpha constantly.

In general, it can be concluded that passive investment can be considered the more
effective and cost-saving approach to large-cap equity investors whereas active funds still
might be appropriate under specific circumstances regarding market cycles and
experience of fund managers.

10.2 Practical Implications

For Investors:

Passive index funds provide a good long-term investment opportunity and are less costly
and risky. Moderate risk investors are advised to place a good proportion of their
exposure to large-cap funds in passive funds.

For Fund Managers:

To be competitive in the large-cap spectrum, active fund managers need to enhance sector
rotation models, decrease portfolio focus, and decrease ratio of expenses.

44
For Policymakers:

The regulators are to encourage awareness on passive investing and reinforce laws on
transparency, tracking error, and disclosure standards.

10.3 Limitations of the Study

The research is relying on secondary data.

The findings are quite limited to large-cap category and cannot be extended to all the
types of mutual funds.

The 202025 market behaviour had a series of abnormal events like the pandemic, which
might not occur in the same manner.

10.4 Future Scope

The research opportunities in the mutual fund industry are changing swiftly, and the
opportunities of the future research are:

The Extension of the Scope to Other Fund Categories.

Comparing mid-cap funds, small-cap funds, hybrid funds, ELSS funds and sector funds
could help see whether the passive or active strategy prevails in any direction.

International Equity Funds Inclusion.

As more and more markets become accessible internationally, it may be better to compare
foreign passive funds (S&P 500, NASDAQ-100, MSCI World) to Indian active funds.

Effects of Smart Beta Investing and Factor-Based Investing.

Value, momentum, low volatility and Smart beta ETFs are other versions of passive
management that should be given a special attention.

Investment behaviour perspective.

Profiling inflow/outflow patterns of fund performance could be explicable through

analyzing investor psychology in crisis and rallies.

Longer Time Horizon Studies

A 10-15year future research can present more constant tendencies in terms of active or
passive strategy superiority.

Forecasting Models that are based on Machine Learning.

45
Future studies can consider how AI and predictive models can be used to determine
trends in mutual fund performance.

10.5 References (20 References, APA Format)

1. AMFI. (2024). Mutual fund industry trends and statistics. Association of Mutual
Funds in India.

2. Bogle, J. C. (2017). The Little Book of Common Sense Investing. Wiley.

3. Carhart, M. M. (1997). On persistence in mutual fund performance. Journal of
Finance, 52(1), 57–82.

4. Chandra, P. (2018). Investment Analysis and Portfolio Management. McGraw-

Hill.

5. Fama, E. F. (1970). Efficient capital markets: A review of theory and empirical

work. Journal of Finance, 25(2), 383–417.

6. Fama, E. F., & French, K. R. (2010). Luck versus skill in the cross-section of
mutual fund returns. Journal of Finance, 65(5), 1915–1947.

7. French, K. R. (2008). The cost of active investing. Journal of Finance, 63(4),

1537–1573.

8. ICICI Prudential Mutual Fund. (2025). Fund fact sheet and performance report.

9. Jayadev, M. (1996). Mutual fund performance: An analysis of monthly returns.

Finance India, 10(1), 73–84.

10. Jensen, M. C. (1968). The performance of mutual funds in the period 1945–1964.
Journal of Finance, 23(2), 389–416.

11. Kotak Mutual Fund. (2025). Bluechip Fund product presentation.

12. Malkiel, B. G. (1995). Returns from investing in equity mutual funds 1971 to
1991. Journal of Finance, 50(2), 549–572.

13. Morningstar India. (2023). Active vs passive funds: Performance barometer.

14. NSE India. (2025). Nifty 50 historical index data.

15. Rao, N. (2000). The risk-return performance of Indian mutual funds. Indian
Journal of Finance, 14(3), 23–31.
16. SEBI. (2024). Mutual fund regulations and disclosure norms. Securities and
Exchange Board of India.

17. Sharpe, W. F. (1966). Mutual fund performance. Journal of Business, 39(1), 119–
138.

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18. Treynor, J. L. (1965). How to rate management of investment funds. Harvard
Business Review, 43(1), 63–75.

19. UTI Mutual Fund. (2025). Nifty 50 Index Fund factsheet.

20. Value Research. (2024). Mutual fund performance analysis and research report.

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