Project Dissertation Report on

A STUDY ON PERFORMANCE
EVALUATION OF LARGE CAP EQUITY
MUTUAL FUNDS

Submitted By

Ananya Das

01109152024

Under the Guidance of

Dr. Meha Joshi

Assistant Professor

Department of Management

Indira Gandhi Delhi Technical University for Women

(Established by Govt. of Delhi vide Act 09 of 2012)

Opposite St. James Church, Kashmere Gate, Delhi-110006

 CERTIFICATE

This is to confirm that the project report, titled "A STUDY ON PERFORMANCE
EVALUATION OF LARGE CAP EQUITY MUTUAL FUNDS," is submitted by Ananya
Das, Enrolment No. 01109152024 in partial fulfilment of the requirements for the degree of
Master of Business Administration (MBA) is a record of Bonafide work carried out by her
under my guidance and supervision.

The content of this report has not been submitted to any other university or institution for the
award of any degree or diploma.

Dr. Meha Joshi

Assistant Professor

Department of Management

Indira Gandhi Delhi Technical University for Women

Kashmere Gate, Delhi-110006

Date: _______________________

Place: New Delhi

i
 DECLARATION

I, Ananya Das, student of Indira Gandhi Delhi Technical University for Women of
Management Batch (2024-2025), declare that every part of the Project Report entitled A
STUDY ON PERFORMANCE EVALUATION OF LARGE CAP EQUITY MUTUAL
FUNDS submitted by me is original.

I was in regular contact with my faculty guide and consulted her on multiple occasions for
discussing the project through phone, email, and visits.

Date of Project Submission: _______________________

Ananya Das

Enrollment No.: 01109152024

Department of Management

Indira Gandhi Delhi Technical University for Women

ii
 ACKNOWLEDGEMENT

The researcher expresses deep gratitude to the institute and Indira Gandhi Delhi Technical
University for Women and Dr. Meha Joshi who served as my mentor for their essential support
of her MBA research work. I received essential guidance from my mentor together with her
constant support which helped them throughout their academic studies.

The mentor maintained her role as a continuous source of motivation while she handled all
necessary tasks to support my learning process. The dedication to academic excellence together
with their innovative teaching methods and student support efforts has created an inspiring
academic environment.

The mentorship has helped me progress in both my personal life and my professional career.
The college staff and peers together with the MBA program staff created an academic
environment that supported my studies. The MBA program created an unforgettable experience
which I want to thank everyone who contributed to its success.

Sincerely,

Ananya Das

Place: New Delhi

iii
 EXECUTIVE SUMMARY

Purpose
The study aims to assess and compare the operational efficiency of two selected large-cap
equity mutual funds, which are Nippon India Large Cap Fund (Direct Growth) and SBI Large
Cap Fund (Direct Plan Growth), through a four-year period assessment that runs from 2022 to
2026 using multiple risk-adjusted performance metrics and statistical tools.

Design/Methodology/Approach
The study uses secondary research methods to analyze historical Net Asset Value (NAV) data
which has been obtained from Yahoo Finance, BSE India, Groww, and AMC websites. I have
used judgmental sampling to select two large-cap mutual fund schemes which they deemed to
be representative of their research. Performance was evaluated against the BSE 100 benchmark
index using financial ratios and statistical tools including Beta, Standard Deviation, Sharpe
Ratio, Treynor Ratio, Jensen's Alpha, and Linear Regression.

Findings
The analysis reveals that both selected large-cap mutual funds demonstrated relatively stable
performance and lower volatility when compared to the BSE 100 benchmark index. The
Nippon India Large Cap Fund demonstrated better performance throughout the study period.
The fund generated a higher overall return of approximately 14% which exceeded the 9%
return of the SBI Large Cap Fund and the 10% return of the benchmark index. The Nippon
India Large Cap Fund achieved superior risk-adjusted performance because it showed higher
Sharpe and Treynor ratios which demonstrated its ability to produce returns while taking on
risks. The funds both showed beta values below one which means they exhibit less market
sensitivity. The positive Jensen's Alpha values for both funds show that they created returns
which exceeded the expected market-adjusted level. The study's results show that both funds
are stable investment options. The study found that Nippon India Large Cap Fund provided
better returns together with superior risk-adjusted performance compared to other investment
options.

iv
 TABLE OF CONTENTS

[Link]. Content Page No.

1. Chapter 1: Introduction 1
1.1 Background 1
1.2 Problem Statement 2
1.3 Objectives of the Study 3
1.4 Scope of Study 4
2. Chapter 2: Literature Review 5
3. Chapter 3: Research Methodology 11
3.1 Research Design 11
3.2 Financial Ratios and Statistical Tools 12
3.3 Sampling Method 14
3.4 Fund Profiles 15
3.5 Research Implications 16
4. Chapter 4: Data Analysis, Findings and 17
Recommendations
4.1 Data Analysis and Interpretation 17
4.2 Findings and Recommendations 24
4.3 Limitations of the Study 26
5. Chapter 5: Conclusions 27
Bibliography 28
Annexure 30

v
CHAPTER 1: INTRODUCTION
1.1 Background
Mutual funds operate as investment funds which gather money from multiple investors
to create investment portfolios that include different types of financial assets (AMFI,
2024). The funds can be designed to handle investment needs which include personal
and family as well as corporate pension and employee savings and other types of
investment requirements (AMFI, 2024). The Indian capital market has experienced
increased investor participation through mutual funds which invest in professionally
managed funds (Agrawal, 2007). Retail investors choose these funds because they
want to use the wide selection of financial assets which professional fund managers
provide (Agrawal, 2007). Investment firms use product development methods to
create new products which enable them to build their business through safe yet
incremental market development. The Indian mutual fund sector has sustained robust
growth in recent years which enabled it to operational multiple main business
achievements because of increasing population and income growth (Agrawal, 2007).
Mutual funds currently provide an exclusive method for wealth growth which both
employed and unemployed people can access that standard financial methods cannot
provide (AMFI, 2024). Mutual funds have become the main investment option which
more people choose to invest their money in (Agrawal, 2007). Digital investment
platforms have opened up investment opportunities to more people by allowing
beginners who know little about retirement planning and investment regulations to
participate in mutual funds (AMFI, 2024). The Association of Mutual Funds in India
(AMFI) currently recognizes 44 fund houses in India which operate more than 2500
investment schemes to serve investors (AMFI, 2024). Investors face difficulties
because they need to choose the best investment option from this wide range of
available options (Agrawal, 2007). Large-cap equity funds belong to mutual fund
types which government rules require them to invest 75 percent of their assets in stocks
from large-cap companies that have market values above ₹20,000 crores (SEBI, 2017).
These funds provide investors with consistent long-term profits which come with
lower risks than other types of equity investments making them suitable for investors
who want to avoid risks (Virparia, 2022). The taxation system imposes a 20% short-
term capital gains tax (STCG) on mutual fund unit sales that occur within one year.

1
Sales after one year trigger a long-term capital gains tax (LTCG) of 12.5% on gains
surpassing ₹1.25 lakh. Moreover, dividend distributions exceeding ₹5,000 face a 10%
Tax Deducted at Source (TDS) (Income Tax Department, 2024). Investors who want
to keep their investment risk low choose large-cap funds because they want to invest
in stocks (Virparia, 2022). Companies which operate as large-cap organizations
maintain financial stability through established business operations and predictable
income generation which makes them preferred options during times of market
instability (Virparia, 2022). Investors benefit from lower price fluctuations because
they can easily sell their investments through multiple methods such as Systematic
Investment Plans (SIPs) or one-time investments (Sharma & Tripathi, 2023). Investors
with conservative risk profiles should choose large-cap funds because these funds
deliver stable performance (Virparia, 2022).

1.2 Problem Statement

The evaluation of two distinct mutual funds involves the use of historical data to
compute essential performance metrics, including Jensen’s Alpha, Beta, Linear
Regression, Sharpe Ratio, and Treynor Ratio (Rao & Ravindran, 2003; Bhagyashree
& Kishori, 2016). The metrics provide essential tools for evaluating mutual fund
performance which enables investors to make better choices (Bhagyashree & Kishori,
2016). Jensen's Alpha quantifies risk-adjusted fund performance by gauging excess
returns over the benchmark which the fund manager achieved through their risk-taking
methods (Tripathi & Japee, 2020). Beta measures a fund's market-driven volatility
while the fund's returns demonstrate its exposure to market changes which assists in
understanding its overall market-related risk (Indhumathi et al., 2019). The linear
regression model serves as a statistical approach to examine how fund returns relate
to benchmark movements which reveals the degree of match between fund
performance and benchmark assessment (Indhumathi et al., 2019; Suri et al., 2024).
The Sharpe Ratio appraises risk-adjusted returns by factoring in total investment risk
which enables fund comparisons to identify investments with optimal risk-reward
characteristics (Tripathi & Japee, 2020). The Treynor Ratio evaluates risk-adjusted
returns through systematic risk assessment using Beta which shows how well funds
create returns based on their market risk exposure (Indhumathi et al., 2019).
Performance evaluation studies provide insights into mutual fund risk-return
characteristics (Tripathi & Japee, 2020). Investors use metric comparisons to evaluate

2
risk-return profiles which help them select investments that match their financial goals
and risk preferences. Such insights help investors understand differences in risk and
return across mutual fund investment strategies (Sharma & Tripathi, 2023; Zein &
Darma, 2023).

1.3 Objectives of the Study

The research will examine the following two main objectives of the study.

• The two large-cap mutual funds Nippon India Large Cap Fund Direct–Growth
and SBI Large Cap Fund Direct Plan–Growth will be evaluated through their
four-year performance record which uses historical NAV data as the basis of
assessment.
• The study assesses market performance of mutual funds by comparing them
with BSE 100 benchmark index through measurement of their returns.
• The study measures risk and volatility of mutual funds through Beta analysis
and Standard Deviation and Linear Regression testing methods.
• The selected mutual funds undergo evaluation through risk-adjusted
performance assessment which uses financial performance ratios including
Sharpe Ratio and Treynor Ratio and Jensen's Alpha.
• To identify which mutual fund delivers superior investment performance
through its risk-return balance and investment productivity, in order to assist
investors in making informed decisions.

3
1.4 Scope of Study
The research evaluates how well different large-cap equity mutual funds perform
in the Indian market. The research investigates two specific mutual fund schemes
which are: -

● Nippon India Large Cap Fund - Direct Growth

● SBI Large Cap Fund - Direct Plan Growth

The fund performance assessment depends on historical Net Asset Value (NAV)
data which has been collected between 2022 and 2026. The study evaluates fund
performance by comparing selected funds with BSE 100 benchmark index. The
study evaluates fund performance through risk analysis and return evaluation and
risk-adjusted performance assessment by using financial ratios and statistical
instruments which include Beta, Standard Deviation, Sharpe Ratio, Treynor Ratio,
Jensen's Alpha and Linear Regression.
The research findings enable investors to achieve better understanding about large-
cap mutual fund performance patterns which will help them choose suitable
investment options (Tripathi & Japee, 2020; Indhumathi et al., 2019). Previous
studies analysing selected large-cap mutual fund schemes have noted that limited
sample sizes and shorter study periods restrict the generalization of findings across
the entire mutual fund industry (Kusuma & Kumar, 2022).

4
CHAPTER 2: LITERATURE REVIEW
The process of evaluating large-cap equity mutual funds in India has developed
through various research studies which now utilize advanced performance metrics and
their associated risk-adjusted return measurements. Rao and Ravindran (2003) started
fundamental research about mutual fund schemes by assessing multiple funds through
testing their performance with the Sharpe ratio, Treynor ratio, Jensen's alpha, and
Fama's measure against the BSE 100 index and other benchmarks. The research
showed that risk-adjusted metrics serve as vital instruments which investors use to
evaluate their investment results in the Indian stock market. Agrawal (2007) studied
the evolution of mutual funds in Indian capital markets by providing a general
description which included both descriptive and analytical elements. The researchers
advanced their work by testing specific research methods through targeted
experiments. The research conducted by Bhagyashree and Kishori in 2016 studied
specific fund programs which operated between 2011 and 2015 using the Sharpe ratio
and Treynor ratio and Jensen's alpha to show that standard performance metrics
effectively assess fund performance. The study by Indhumathi et al. (2019) focused
on large-cap funds through which they combined these ratios with beta, standard
deviation, and regression analysis to create a statistical framework that they built
during their short research period. Tripathi and Japee (2020) developed multi-metric
assessment methods for equity mutual funds through their research which used
multiple evaluation techniques along with Sharpe ratio, Treynor ratio, Jensen's alpha,
beta and standard deviation measurements. Sharma (2020) was not really following
the same path as most researchers writing around that time. While the bulk of the
literature kept gravitating toward equity funds, this study stayed with debt mutual fund
schemes in India — a segment that was getting comparatively less dedicated attention.
Alpha, beta, and standard deviation were the tools used to assess performance, and
what came out of that analysis was a picture of debt schemes behaving, as one might
expect, with considerably more restraint in terms of both risk and return than what the
equity-focused studies around it was reporting. The research conducted by Sharma
and his colleagues (2021) examined two types of investment products because the
researchers wanted to identify how their unpredictable price movements behaved. The
study by Shreekant and his team showed that they had conducted a research project
which lasted 13 years to investigate how actively managed mutual funds performed

5
compared to passive index funds in India. The study used performance measurement
tools such as Jensen's Alpha and other risk-adjusted metrics to assess whether actively
managed funds achieved better results than their benchmark indexes. The analysis
showed that some funds achieved positive alpha results while statistical analysis of
mutual funds proved impossible to establish their performance level yet the analysis
confirmed that index funds faced continuous losses to mutual funds throughout the
examined period. The Virparia study performed in 2022 examined large-cap equity
funds through standard risk-return assessment techniques which included beta values.
The research conducted by Kusuma and Kumar in 2022 used three performance
metrics to evaluate 27 large-cap funds from 2011 to 2021 which showed that the funds
maintained consistent risk-adjusted performance throughout the evaluation period.
The research conducted by Sharma and Tripathi in 2023 established distinctions
between large-cap funds and mid-cap funds and small-cap funds which operate under
Systematic Investment Plans (SIPs) because large-cap funds demonstrate better
performance through reduced volatility and increased Sharpe ratio consistency while
the study failed to include lump-sum investment methods. The research conducted by
Zein and Darma in 2023 investigated three investment strategies which include lump-
sum investing and dollar-cost averaging and value averaging through Kruskal–Wallis
and Mann–Whitney tests which demonstrated that lump-sum investing provided better
risk-adjusted results. The study by Suri et al. (2024) evaluated eleven large-cap funds
to determine their performance against the NIFTY 100 benchmark during the time
period from 2014 until 2023 and the results showed that most funds matched
benchmark performance. More recently, Verma et al. (2025) applied multivariate
conjoint analysis to the Indian mutual fund industry, revealing that fund category,
AUM, and fund manager experience are the primary determinants that investment
advisors consider when selecting funds, while past performance and expense ratio
were assigned the least weight — a finding that challenges the assumption that
performance metrics alone guide fund selection and reinforces the gap between
quantitative evaluation tools and actual investor decision-making behaviour. The
existing literature depends on risk-adjusted metrics which include the Sharpe ratio and
Treynor ratio and Jensen's alpha and beta and regression methods. Although previous
research investigated mutual fund performance through these risk-adjusted metrics
most studies assess mutual funds by their overall fund categories instead of
specializing in large-cap equity schemes. The existing research studies choose to

6
combine multiple funding categories instead of researching large-cap equity funds
through existing contemporary research methods. The research analysis suffers from
three major problems which include small sample sizes and short duration studies and
the use of limited measurement tools which prevent detailed understanding of risk-
return patterns during unpredictable market conditions. Moreover, a notable void
exists in bridging these financial metrics to investor decision-making, underscoring
the demand for a targeted analysis of large-cap funds using diverse risk-adjusted tools
over recent periods, benchmarked against indices like the BSE 100, to illuminate their
performance in current conditions.

RESEARCH GAP
The literature review on the performance evaluation of large-cap equity mutual funds
in India shows multiple essential research gaps which restrict the research scope and
practical use of current studies. The existing research fails to study large-cap funds as
they should because researchers combine all fund types which include equity hybrid
debt mid-cap and small-cap funds instead of conducting dedicated research the current
state of large-cap funds. The research suffers due to its methods because the study
requires larger sample sizes and longer research periods which should not use
traditional metrics that include the Sharpe ratio and Treynor ratio and Jensen's alpha
and beta and standard deviation because these metrics restrict complete performance
analysis during changing market conditions and after regulatory changes. The BSE
100 benchmark is used for comparison purposes yet researchers have not conducted
complete evaluations which test multiple risk-adjusted evaluation methods across long
time periods while they have failed to study lump-sum investment approaches which
should include behavioral and investor perception assessment according to recent
reassessments. The current research gap shows that researchers do not understand how
alpha generation and volatility patterns and benchmark biases and sectoral
concentrations affect actual investor decision-making between active and passive
investment methods. These gaps highlight the imperative for a targeted study that
employs multiple risk-adjusted measures on large-cap funds across recent periods,
supported by robust benchmarking, to better illuminate their behavior in today's
evolving market landscape.

7
 Scope of Methodology
Study Purpose Limitation Research Gap Source
Analysis Approach

Uses This study evaluates

traditional mutual fund
Performance
performance performance using
Evaluation Analysis of Sharpe Ratio,
Evaluation of measures traditional risk-adjusted Rao &
of Indian 269 mutual Treynor Ratio,
mutual fund and excludes measures but does not Ravindran
Mutual fund Jensen’s Alpha,
performance behavioural focus specifically on (2003)
Funds schemes Fama’s measure
or broader large-cap equity mutual
statistical funds or recent market
analysis. conditions

The study mainly

Primarily
discusses the
descriptive
Measuring Growth of development of the
Study of study with
Performance mutual funds Analytical and mutual fund industry
mutual fund limited Agrawal
of Indian in Indian descriptive and does not provide a
industry empirical (2007)
Mutual capital approach detailed risk-adjusted
development performance
Funds markets performance analysis of
evaluation.
individual mutual fund
schemes.

The study analyses

Performance Limited selected mutual fund
Risk-return Study of Bhagyashre
Evaluation Sharpe Ratio, number of schemes but is limited
performance selected e &
of Mutual Treynor Ratio, mutual fund by a small sample size
of mutual schemes Kishori
Fund Jensen’s Alpha schemes and does not focus
funds (2011–2015) (2016)
Schemes analysed. specifically on large-
cap equity funds.

Short study
The study evaluates
duration,
Performance mutual fund
Comparative limits long- Indhumathi
Evaluation Risk-adjusted Sharpe Ratio, performance using
analysis of term , Babu &
of Large mutual fund Treynor Ratio, statistical tools but is
selected performance Gayathri
Cap Mutual performance Jensen’s Alpha limited to a short study
schemes insights. (2019)
Funds period and a restricted
number of schemes.

Sharpe Ratio, Limited

The research focuses on
Performance Treynor Ratio, number of
Evaluation equity mutual funds in
Evaluation Risk-return Jensen’s Alpha equity Tripathi &
of equity general and does not
of Equity relationship in with beta and mutual fund Japee
mutual fund isolate the performance
Mutual mutual funds standard schemes (2020)
schemes of large-cap equity
Funds deviation analysed.
mutual funds.

8
 Scope of Methodology
Study Purpose Limitation Research Gap Source
Analysis Approach

The study concentrates

on debt mutual fund
Performance Alpha, Beta,
Impact of Analysis of Focus only schemes and does not
Evaluation Standard Sharma
market five debt on debt examine the
of Debt Deviation (2020)
fluctuations schemes mutual funds performance of equity
Mutual analysis
or large-cap mutual
Funds
funds.

Focuses on
Performance
fund
evaluation Although the study
management
of actively compares active and
Comparison Performance style
managed 13-year passive mutual funds, it Shreekant
of actively metrics comparison
and passive comparative does not specifically et al.
managed and including rather than
(index) study analyse large-cap equity (2020)
passive funds Jensen’s Alpha detailed
mutual mutual fund schemes.
scheme
funds in
performance
india
.

Combines
The research evaluates
multiple
Volatility and different mutual fund
Mutual Fund fund Sharma &
performance Analysis of Risk-return categories collectively
Performance categories, Joshi
of equity and 15 schemes analysis without providing a
in India reducing (2021)
hybrid funds focused analysis of
depth of
large-cap equity funds.
analysis.

The study examines

Performance Study period large-cap mutual funds
Analysis of
Evaluation Risk-adjusted Sharpe Ratio, excludes but does not include Kusuma &
27 large-cap
of Large- performance Treynor Ratio, recent recent market periods or Kumar
funds
Cap Mutual evaluation Jensen’s Alpha market incorporate broader (2022)
(2011–2021)
Funds conditions. statistical performance
measures.

The research provides

Uses limited
Study on descriptive analysis of
Large-cap statistical
Large Cap Descriptive large-cap funds but
equity mutual Risk-return tools for Virparia
Equity analysis of relies on limited
fund analysis performance (2022)
Mutual schemes statistical techniques for
performance evaluation.
Funds performance evaluation.

9
 Scope of Methodology
Study Purpose Limitation Research Gap Source
Analysis Approach

Examines
The study evaluates
mutual funds
Performance mutual fund
To assess Indian broadly
Evaluation performance across
efficiency and mutual funds Risk-return and without Agrawal
of Mutual multiple categories but
benchmark across alpha evaluation detailed (2023)
Funds in does not specifically
alignment categories scheme-
India focus on large-cap
level
equity mutual funds.
analysis.

The research compares

Comparative
mutual fund categories
Study of To compare
SIP under the SIP
Large-Cap, risk and Standard Restricted to Sharma &
investments investment mode but
Mid-Cap, return across deviation, SIP mode Tripathi
across fund does not examine lump-
and Small- fund Sharpe ratio only (2023)
types sum investment
Cap Mutual categories
strategies.
Funds under
SIP

Investment
The study focuses on
Strategy Sharpe,
To compare investment strategies
Comparison: Equity fund Treynor,
different Not India- rather than analysing Zein &
Lump Sum investment Kruskal-Wallis,
investment specific the performance of Darma
vs approaches Mann-Whitney
strategies mutual funds within the (2023)
Averaging tests
Indian market context.
Methods

The study evaluates

Risk- risk-adjusted
Adjusted To evaluate Sharpe ratio, Ignores performance using
Nihal &
Returns in risk-adjusted Large-cap Treynor ratio behavioural financial metrics but
Reddy
Mutual performance mutual funds and Jensen’s investor does not incorporate
(2024)
Funds in of mutual in India Alpha factors behavioural investor
India funds factors or investor
perception.

The study focuses on

To identify
Determinant Does not determinants of mutual
key factors
s of Mutual Indian Conjoint/ analyse fund selection rather
used by Verma et
Fund mutual fund multivariate mutual fund than evaluating the
investment al. (2025)
Selection in industry analysis financial financial performance
advisors in
India performance of mutual funds.
fund selection

10
CHAPTER 3: RESEARCH METHODOLOGY
3.1 Research Design
The current research operates through a research design that combines descriptive
methods with quantitative methods to evaluate the performance of selected large-cap
equity mutual funds in India. The mutual fund schemes of this study undergo risk
assessment through historical financial data analysis. The study uses secondary data
sources which include Net Asset Value (NAV) data for the selected mutual fund
schemes and information from the relevant benchmark index. The researchers gathered
data from trustworthy financial sources which include Yahoo Finance BSE India
Groww and Asset Management Company (AMC) websites. The research period
extends from 2022 until 2026 which includes four complete calendar years. The study
analyzes two mutual fund schemes which include Nippon India Large Cap Fund
(Direct Growth) and SBI Large Cap Fund (Direct Plan Growth). The researchers used
judgmental sampling to select these funds because they needed established schemes
which contained enough historical data to conduct their analysis. Researchers
implemented financial ratios and statistical tools to assess the performance of selected
funds through their use of beta standard deviation Sharpe ratio Treynor ratio Jensen's
alpha and linear regression (Indhumathi et al., 2019; Tripathi & Japee, 2020; Kusuma
& Kumar, 2022). Mutual fund performance evaluation employs three dimensions,
utilizing these metrics to gauge risk, return, and risk-adjusted performance relative to
the BSE 100 benchmark index (Kusuma & Kumar, 2022; Suri et al., 2024). The study
applies quantitative methodologies to present mutual fund performance findings over
the designated timeframe, simultaneously assessing their ability to generate
investment returns commensurate with the investment risk undertaken by investors.

11
3.2 Financial Ratios and Statistical Tools

This section outlines the key financial ratios and statistical tools employed to evaluate
the performance of Indian large-cap mutual funds. The metrics enable researchers to
evaluate the Indian market's fund performance through their assessment of risk, return,
and managerial abilities.

3.2.1 Beta

The financial instrument beta measures systematic risk because it shows how a fund
behaves during market changes. A beta value above 1 shows that an asset will
experience more price swings than the overall market while a beta value below 1
shows that it will experience fewer price swings. Beta is widely used to assess how
mutual fund returns respond to overall market movements and benchmark indices
(Indhumathi et al., 2019; Tripathi & Japee, 2020).

This study will use the following formula which is used by Sharpe, W. F. (1964) in
their study: -

β = [nΣxy − (Σx) (Σy)] / [nΣx² − (Σx) ²]

where β = Beta coefficient, n = Number of observations, Σxy = Sum of the product of x and y values,
Σx = Sum of x values, Σy = Sum of y values, Σx² = Sum of squared x values.

3.2.2 Sharpe Ratio

The Sharpe Ratio evaluates risk-adjusted performance through direct comparison of

excess return to total risk which uses standard deviation as its measurement method.
The system computes the return obtained for each unit of complete risk assessment
which enables investors to identify funds that deliver exceptional returns through
steady performance with minor risk increases. The ratio functions as a fundamental
measurement for Indian large-cap mutual funds because it evaluates efficiency during
times of market volatility (Bhagyashree & Kishori, 2016; Rao & Ravindran, 2003).

This study will use the following formula which is used by Sharpe, W. F. (1966) in
their study: -

S = (Rp - Rf) / σ

where Rp = Portfolio Return, Rf = Risk-free Rate, σ = Standard Deviation of Portfolio Returns

12
3.2.3 Treynor Ratio

The Treynor Ratio measures risk-adjusted investment returns by using systematic risk
(beta) as its denominator because it calculates market risk exposure returns. The
method applies to large-cap mutual funds because their diversified portfolio structure
minimizes non-systematic risk. In the Indian setting, it underscores funds that adeptly
handle market risk to produce excess returns (Indhumathi et al., 2019; Tripathi &
Japee, 2020).

This study will use the following formula which is used by Treynor, J. L. (1965) in
their study: -

T = (Rj - Rf) / βp

where Rj = Portfolio Return, Rf = Risk-free Rate, βp = Beta of the Portfolio

3.2.4 Jensen's Alpha

Jensen's Alpha measures how much a fund's returns exceed the Capital Asset Pricing
Model (CAPM) prediction which enables assessment of a fund manager's security
selection abilities. A positive alpha signifies outperformance due to managerial
choices while a negative alpha points to underperformance. For Indian equity mutual
funds, Jensen’s alpha is commonly used to evaluate whether fund managers generate
returns beyond market expectations (Rao & Ravindran, 2003; Bhagyashree & Kishori,
2016).

This study will use the following formula which is used by Jensen, M. C. (1968) in
their study: -

α = Rp − [Rf + β(Rm − Rf)]

Jensen’s Alpha Formula (where Rp = portfolio return, Rf = risk-free rate, Rm = market return, β = beta
coefficient)

Jensen alpha can also be derived from beta using the following formula which was
used by Jensen (1968) in their study: -

α = ȳ − βx̄

The following tools are utilized for the analysis:

1. Beta (systematic risk measure)
2. Sharpe Ratio (total risk-adjusted return)

13
 3. Treynor Ratio (systematic risk-adjusted return)
4. Jensen's Alpha (managerial skill indicator)
5. Standard Deviation (total volatility)
6. R-squared (market explanatory power)
The tools enable a strong assessment of Indian large-cap mutual fund performance
which research on risk-adjusted metrics has demonstrated (Suri et al., 2024; Kusuma
& Kumar, 2022).

3.3 Sampling Method and Study Period

The researchers selected two large-cap equity mutual fund schemes through
judgmental sampling to evaluate their performance. The selected schemes are analysed
using market benchmark comparisons to assess their equity market performance.
Previous studies on mutual fund performance commonly compare selected schemes
with market indices such as the BSE Sensex to assess how effectively the funds
perform relative to overall market movements (Bhagyashree & Kishori, 2016).

Two large-cap mutual fund schemes managed by different asset management

companies serve as the sample for this study. The companies are: -

1. Nippon India Large Cap Fund Direct Growth

2. SBI Large Cap Fund Direct Plan Growth.

The selected funds undergo performance evaluation from 2022 until 2026, using the
BSE 100 index as the benchmark. Mutual fund research commonly uses benchmark
indices to evaluate fund performance during specific time periods, in order to compare
fund returns with market performance (Bhagyashree & Kishori, 2016). The study
measures performance using both return indicators and risk-adjusted performance
measures which apply to the selected schemes. The analysis comprises total return and
standard deviation, with standard deviation employed to assess return volatility and
the distribution of returns around the mean value (Agrawal, 2007). The study also uses
Sharpe ratio and Treynor ratio to assess risk-adjusted returns. The Sharpe ratio
calculates the excess return of a portfolio in relation to its overall risk, whereas the
Treynor ratio evaluates returns concerning the systematic risk indicated by beta
(Bhagyashree & Kishori, 2016).

14
3.4 Fund Profiles
Nippon India Large Cap Fund – Direct Growth

The Nippon India Large Cap Fund Direct Growth operates as a major equity mutual
fund in India which invests in large-cap stocks to achieve long-term capital growth
within an emerging economy according to Virparia, 2022. Indian large-cap funds
generate positive alphas via security selection though their benchmarks show no
evidence of ongoing market inefficiencies and trading activities (Indhumathi et al.,
2019). Mutual fund performance is commonly evaluated through risk-adjusted
measures such as Sharpe ratio, Treynor ratio, and Jensen’s alpha to assess managerial
efficiency (Tripathi & Japee, 2020). The funds demonstrate performance continuity
after the subprime crisis because they provide dependable large-cap investments that
withstand worldwide market fluctuations (Suri et al., 2024).

SBI Large Cap Fund – Direct Plan Growth

The SBI Large Cap Fund – Direct Plan Growth is an actively managed equity fund in
India, targeting large-cap companies for superior long-term growth in volatile
emerging markets. Most people think that large-cap mutual funds are safe investments
because they put money into companies that are financially stable and have a strong
market position (Virparia, 2022). Risk-adjusted measures such as alpha and beta are
widely used to assess mutual fund performance relative to benchmark indices
(Indhumathi et al., 2019; Tripathi & Japee, 2020). Mutual fund performance is often
evaluated through alpha generation and risk-adjusted measures to determine
managerial efficiency (Indhumathi et al., 2019). The post-subprime crisis scenario
shows these funds maintaining risk-adjusted performance through multiple time
frames, which makes them suitable for investors who want large-cap stocks to protect
against market mood swings (Kusuma & Kumar, 2022; Suri et al., 2024).

15
3.5 Research Implications
The study results deliver important findings, which benefit all mutual fund industry
stakeholders. The research investigates risk-adjusted performance in large-cap mutual
funds, which functions as a practical tool for managing operations and provides
academic research, its results work as both a practical tool and theoretical foundation.

Managerial Implications
The research shows fund managers their current portfolio management methods
because it shows them how to use risk-adjusted performance metrics to make
investment choices. The study helps asset management companies improve their
portfolio diversification methods while they create more effective risk management
frameworks. Our study aligns with the findings of Agrawal (2007), who also
emphasized that portfolio diversification and fund management strategies significantly
influence mutual fund performance.

Practical Implications
The analysis helps investors understand the risk and return characteristics of large-cap
mutual funds, and it supports investors in selecting funds that match their financial
goals and risk tolerance. The research presents insights about large-cap mutual fund
performance when comparing it to the BSE 100 benchmark. Similar results were
reported by Bhagyashree and Kishori (2016), who found that several mutual fund
schemes generated risk-adjusted returns and outperformed benchmark indices, helping
investors make informed investment decision.

Theoretical Implications
The study advances academic research on mutual fund performance assessment
because it proves financial models like Jensen's Alpha and CAPM-based analysis can
be used in this area. The study shows that statistical techniques function as reliable
instruments which assess risk-return performance in the Indian mutual fund industry.
This result is consistent with Narayan Rao (2003), who demonstrated that mutual fund
schemes can generate excess returns when evaluated using risk-adjusted performance
measures.

16
 CHAPTER 4: DATA ANALYSIS, FINDINGS AND
RECOMMENDATION
4.1 Data Analysis and Interpretation
NAVs MONTHLY
RETURNS

Date SBI NIPPON BSE100 RET. SBI RET. RET BSE100

NIPPON

Jan-22 66.8977 55.1257 17618.04

Feb-22 64.6567 53.9966 17043.27 -3.3500% -2.0481% -3.2624%

Mar-22 62.9836 52.7244 17723.94 -2.5876% -2.3562% 3.9938%

Apr-22 65.4186 55.1254 17574.51 3.8661% 4.5540% -0.8431%

May-22 61.2640 51.5644 16887.92 -6.3508% -6.4599% -3.9067%

Jun-22 60.3695 50.9250 16014.13 -1.4601% -1.2399% -5.1741%

Jul-22 62.7721 53.3234 17530.28 3.9798% 4.7096% 9.4676%

Aug-22 67.0655 57.5750 18222.39 6.8396% 7.9733% 3.9481%

Sep-22 67.6372 58.5161 17574.98 0.8524% 1.6346% -3.5528%

Oct-22 66.9333 58.4008 18405.94 -1.0407% -0.1971% 4.7281%

Nov-22 69.8973 60.7755 19081.7 4.4284% 4.0663% 3.6714%

Dec-22 70.2129 61.0797 18425.17 0.4514% 0.5005% -3.4406%

Jan-23 70.1214 61.0042 17935.75 -0.1303% -0.1236% -2.6563%

Feb-23 69.0608 60.0317 17538.2 -1.5126% -1.5941% -2.2165%

Mar-23 68.8489 59.8300 17601.67 -0.3068% -0.3360% 0.3619%

Apr-23 66.9682 58.6334 18324.96 -2.7316% -2.0000% 4.1092%

May-23 69.0597 60.2741 18909.41 3.1230% 2.7983% 3.1894%

Jun-23 74.5363 65.9034 19571.34 7.9303% 9.3395% 3.5005%

Jul-23 77.5892 69.3496 20150.32 4.0959% 5.2292% 2.9583%

Aug-23 77.0732 70.3836 19764.93 -0.6651% 1.4910% -1.9126%

Sep-23 78.6884 72.5435 20123.3 2.0957% 3.0687% 1.8132%

Oct-23 77.8188 71.5880 19558.03 -1.1051% -1.3171% -2.8090%

17
Nov-23 78.2133 72.1764 20718.71 0.5069% 0.8219% 5.9345%

Dec-23 83.3624 78.0920 22384.89 6.5834% 8.1961% 8.0419%

Jan-24 84.9371 80.8192 22509.19 1.8890% 3.4922% 0.5553%

Feb-24 84.8906 83.1539 22921.27 -0.0547% 2.8889% 1.8307%

Mar-24 92.9571 90.3731 23294.04 9.5022% 8.6817% 1.6263%

Apr-24 88.5145 87.6920 23759.67 -4.7791% -2.9667% 1.9989%

May-24 89.8522 88.8777 23771.04 1.5113% 1.3521% 0.0479%

Jun-24 94.3304 92.6771 25397.77 4.9840% 4.2749% 6.8433%

Jul-24 98.3970 97.1564 26438.85 4.3110% 4.8332% 4.0991%

Aug-24 98.8008 97.3660 26726.58 0.4104% 0.2157% 1.0883%

Sep-24 102.7068 100.2801 27338.6 3.9534% 2.9929% 2.2899%

Oct-24 100.9691 98.1630 25526.3 -1.6920% -2.1112% -6.6291%

Nov-24 97.8427 95.7415 25546.61 -3.0963% -2.4668% 0.0796%

Dec-24 99.0992 97.9487 25061.75 1.2841% 2.3054% -1.8979%

Jan-25 95.4647 93.3719 24626.67 -3.6675% -4.6727% -1.7360%

Feb-25 93.3641 90.6548 22978.78 -2.2004% -2.9100% -6.6915%

Mar-25 92.9571 90.3731 24577.8 -0.4360% -0.3106% 6.9587%

Apr-25 95.4562 93.0451 25375.24 2.6885% 2.9566% 3.2446%

May-25 100.0260 97.7799 25940.24 4.7873% 5.0887% 2.2266%

Jun-25 101.8438 100.4222 26762.83 1.8174% 2.7023% 3.1711%

Jul-25 103.2400 101.3065 25961.78 1.3709% 0.8805% -2.9931%

Aug-25 101.4861 100.8298 25556.76 -1.6989% -0.4705% -1.5601%

Sep-25 102.6322 102.5381 25810.92 1.1293% 1.6942% 0.9945%

Oct-25 104.0822 103.8162 26988.8 1.4129% 1.2465% 4.5635%

Nov-25 105.5094 104.7005 27414.82 1.3712% 0.8518% 1.5785%

Dec-25 106.2663 104.8810 27344.72 0.7174% 0.1724% -0.2557%

Jan-26 107.3311 105.4001 26536.38 1.0020% 0.4949% -2.9561%

Table 4.1: Comparative Analysis of Selected Large Cap Mutual Funds (2022-2026)

Source: Calculated based on NAV Data of Respective Schemes and Benchmark Index

18
 RET. RET.
SBI NIPPON RET BSE100
TOTAL RETURNS (Rp) 9% 14% 10%
((ENDING NAV/INITIAL
NAV)^(1/n))-1

Stdev (monthly) 3.27% 3.37% 3.72%

Stdev (Annualised) 11.31% 11.67% 12.87%
Rf (Risk Free Return) 6.870%
Beta 0.43 0.48

Sharpe Ratio 0.15 0.60

Rp-Rf/(annualised stdev
of daily returns)
Treynor Ratio 0.04 0.15
Rp-Rf/(Beta of the fund)
Table 4.2: Risk-Adjusted Performance Metrics Summary

Source: Calculated based on NAV Data of Respective Schemes and Benchmark Index

Interpretation

Table 4.1 displays the monthly Net Asset Value (NAV) data together with the
calculated monthly returns for two large-cap mutual funds, SBI Large Cap Fund,
Nippon India Large Cap Fund and their benchmark BSE 100 index in the period from
2022 to 2026. The two funds showed return variations throughout the period because
their performance depended on both general market trends and benchmark index
fluctuations.
The analysis shows that Nippon India Large Cap Fund achieved better returns with
14% total gain than SBI Large Cap Fund which returned 9% while BSE 100
benchmark produced approximately 10% return during the same time frame. The
results show that Nippon India fund performed better than the benchmark index while
SBI Large Cap Fund provided returns which were slightly lower than the market
benchmark. Also, the standard deviation of monthly returns for SBI Large Cap Fund
shows a volatility level of 3.27% while Nippon India Large Cap Fund shows a slightly
higher volatility of 3.37%. The benchmark index demonstrates a higher volatility level
of 3.72% which shows that both mutual funds selected for evaluation show lower
volatility than the overall market. The annualized volatility levels rise to 11.31% for
SBI, 11.67% for Nippon India and 12.87% for BSE 100 index which shows that funds
maintain steadier return patterns than the benchmark.
The beta values further explain the systematic risk associated with the funds. The SBI

19
Large Cap Fund has a beta of 0.43, while the Nippon India Large Cap Fund has a beta
of 0.48. The funds exhibit reduced market sensitivity because both beta values measure
below 1 which indicates that funds maintain lower systematic risk than the benchmark
index. The feature attracts investors who want to keep their investments stable
throughout market downturns. On the other hand, the Sharpe Ratio serves as the
method for assessing performance after adjusting for risk. The Nippon India Large
Cap Fund records a Sharpe Ratio of 0.60, which is significantly higher than the SBI
Large Cap Fund’s Sharpe Ratio of 0.15. This indicates that Nippon India generated
greater excess returns through its risk management processes which created more
effective results according to risk-adjusted performance standards.

The Treynor Ratio serves as a measurement tool that calculates returns which investors
receive for each unit of market risk. The Treynor Ratio of Nippon India Large Cap
Fund stands at 0.15 while SBI Large Cap Fund shows a lower ratio of 0.04. Nippon
India achieved superior performance because its Treynor Ratio allowed the fund to
generate higher returns when investors took on market risk. Both funds kept their
market risk below the benchmark index throughout the period — that much they had
in common. Where they diverged was in what they actually did with that risk. Nippon
India Large Cap Fund translated it into higher total returns and stronger risk-adjusted
outcomes than SBI Large Cap Fund managed over the same stretch, which is
ultimately what separates the two when the numbers are laid out together.

20
 Nippon India Large Cap Fund

Y X XY X^2
-2.0481% -3.2624% 0.000668 0.001064
-2.3562% 3.9938% -0.000941 0.001595
4.5540% -0.8431% -0.000384 0.000071
-6.4599% -3.9067% 0.002524 0.001526
-1.2399% -5.1741% 0.000642 0.002677
4.7096% 9.4676% 0.004459 0.008964
7.9733% 3.9481% 0.003148 0.001559
1.6346% -3.5528% -0.000581 0.001262
-0.1971% 4.7281% -0.000093 0.002235
4.0663% 3.6714% 0.001493 0.001348
0.5005% -3.4406% -0.000172 0.001184
-0.1236% -2.6563% 0.000033 0.000706
-1.5941% -2.2165% 0.000353 0.000491
-0.3360% 0.3619% -0.000012 0.000013
-2.0000% 4.1092% -0.000822 0.001689
2.7983% 3.1894% 0.000892 0.001017
9.3395% 3.5005% 0.003269 0.001225
5.2292% 2.9583% 0.001547 0.000875
1.4910% -1.9126% -0.000285 0.000366
3.0687% 1.8132% 0.000556 0.000329
-1.3171% -2.8090% 0.000370 0.000789
0.8219% 5.9345% 0.000488 0.003522
8.1961% 8.0419% 0.006591 0.006467
3.4922% 0.5553% 0.000194 0.000031
2.8889% 1.8307% 0.000529 0.000335
8.6817% 1.6263% 0.001412 0.000264
-2.9667% 1.9989% -0.000593 0.000400
1.3521% 0.0479% 0.000006 0.000000
4.2749% 6.8433% 0.002925 0.004683
4.8332% 4.0991% 0.001981 0.001680
0.2157% 1.0883% 0.000023 0.000118
2.9929% 2.2899% 0.000685 0.000524
-2.1112% -6.6291% 0.001400 0.004394
-2.4668% 0.0796% -0.000020 0.000001
2.3054% -1.8979% -0.000438 0.000360
-4.6727% -1.7360% 0.000811 0.000301
-2.9100% -6.6915% 0.001947 0.004478
-0.3106% 6.9587% -0.000216 0.004842
2.9566% 3.2446% 0.000959 0.001053
5.0887% 2.2266% 0.001133 0.000496
2.7023% 3.1711% 0.000857 0.001006
0.8805% -2.9931% -0.000264 0.000896
-0.4705% -1.5601% 0.000073 0.000243
1.6942% 0.9945% 0.000168 0.000099
1.2465% 4.5635% 0.000569 0.002083
0.8518% 1.5785% 0.000134 0.000249
0.1724% -0.2557% -0.000004 0.000007
0.4949% -2.9561% -0.000146 0.000874
0.679 0.444 0.037872 0.070392

21
 Y X XY X^2 x MEAN Y MEAN
0.679274 0.444211 0.037871539 0.070392 0.009254 0.014152

β = [nΣxy − (Σx) (Σy)]

/ [nΣx² − (Σx) ²] α = ȳ − βx̄
BETA 0.48 ALPHA 0.00974

Table 4.3: Jensen Alpha calculation of Nippon India Large Cap Fund

Interpretation

The beta value for Nippon India Large Cap Fund came out to be 0.48, with BSE 100
taken as the benchmark index for this study. Beta as a concept is not complicated — it
simply shows the relationship between how much the fund moves and how much the
market moves at the same time. Since 0.48 is less than 1, the fund moves lesser than
the market does. To give a concrete picture, if the market goes up by 1%, the fund
would only go up by around 0.48%. So, the fund does not react to market changes as
strongly as the market itself does.

Why does this matter for investors? Because not every type of risk can be reduced by
spreading money across different stocks. There is a category of risk that stays in every
investment no matter what — and that comes from things happening at the economy
level, like inflation rising, interest rates changing, or political instability. This is what
systematic risk means. A beta of 0.48 tells us that the fund is not very sensitive to these
broader forces. When markets go through rough patches, this fund would not fall as
hard. When markets rally strongly, it would also not gain as much. The movement
stays moderate on both ends, which is exactly what conservative investors tend to look
for.

The alpha for this fund was calculated at 0.00974. Alpha comes from the CAPM
framework, where an expected return is calculated for every fund based on what its
beta is and what the market returned during that time. This expected return acts like a
benchmark for performance evaluation. If the fund's actual return matches this figure,
alpha becomes zero. If actual returns fall short, alpha turns negative. In this case, alpha
is 0.00974, which is positive — meaning the fund earned more than what CAPM
predicted it should have earned. The gap between actual and expected return is what
this alpha captures.

22
X Y XY X^2
-3.2624% -3.3500% 0.0010929 0.00106433
3.9938% -2.5876% -0.0010334 0.00159504
-0.8431% 3.8661% -0.0003259 0.00007108
-3.9067% -6.3508% 0.0024811 0.00152623
-5.1741% -1.4601% 0.0007555 0.00267713
9.4676% 3.9798% 0.0037679 0.00896354
3.9481% 6.8396% 0.0027004 0.00155875
-3.5528% 0.8524% -0.0003029 0.00126224
4.7281% -1.0407% -0.0004920 0.00223549
3.6714% 4.4284% 0.0016258 0.00134792
-3.4406% 0.4514% -0.0001553 0.00118377
-2.6563% -0.1303% 0.0000346 0.00070559
-2.2165% -1.5126% 0.0003353 0.00049129
0.3619% -0.3068% -0.0000111 0.00001310
4.1092% -2.7316% -0.0011225 0.00168855
3.1894% 3.1230% 0.0009961 0.00101723
3.5005% 7.9303% 0.0027760 0.00122535
2.9583% 4.0959% 0.0012117 0.00087515
-1.9126% -0.6651% 0.0001272 0.00036580
1.8132% 2.0957% 0.0003800 0.00032877
-2.8090% -1.1051% 0.0003104 0.00078905
5.9345% 0.5069% 0.0003008 0.00352183
8.0419% 6.5834% 0.0052943 0.00646722
0.5553% 1.8890% 0.0001049 0.00003084
1.8307% -0.0547% -0.0000100 0.00033515
1.6263% 9.5022% 0.0015453 0.00026449
1.9989% -4.7791% -0.0009553 0.00039956
0.0479% 1.5113% 0.0000072 0.00000023
6.8433% 4.9840% 0.0034107 0.00468308
4.0991% 4.3110% 0.0017671 0.00168026
1.0883% 0.4104% 0.0000447 0.00011844
2.2899% 3.9534% 0.0009053 0.00052436
-6.6291% -1.6920% 0.0011216 0.00439450
0.0796% -3.0963% -0.0000246 0.00000063
-1.8979% 1.2841% -0.0002437 0.00036020
-1.7360% -3.6675% 0.0006367 0.00030137
-6.6915% -2.2004% 0.0014724 0.00447762
6.9587% -0.4360% -0.0003034 0.00484235
3.2446% 2.6885% 0.0008723 0.00105274
2.2266% 4.7873% 0.0010659 0.00049577
3.1711% 1.8174% 0.0005763 0.00100559
-2.9931% 1.3709% -0.0004103 0.00089586
-1.5601% -1.6989% 0.0002650 0.00024339
0.9945% 1.1293% 0.0001123 0.00009890
4.5635% 1.4129% 0.0006448 0.00208255
1.5785% 1.3712% 0.0002164 0.00024917
-0.2557% 0.7174% -0.0000183 0.00000654
-2.9561% 1.0020% -0.0002962 0.00087385
0.444 0.500 0.033 0.07039

23
 SBI Large Cap Fund

Y X XY X^2 x MEAN Y MEAN

0.444 0.5003 0.03325 0.07039 0.00925 0.010422852

β = [nΣxy − (Σx) (Σy)]

/ [nΣx² − (Σx) ²] α = ȳ − βx̄
BETA 0.43 ALPHA 0.00636

Table 4.4: Jensen Alpha Calculation for SBI Large Cap Fund

Interpretation

The SBI Large Cap Fund Direct Plan Growth fund has a beta value of 0.43. Beta
establishes the degree to which a fund responds to variations in market benchmark
performance. A fund demonstrates lower market volatility if its beta value which falls
below 1. The SBI Large Cap Fund shows less price movement than the BSE 100
benchmark index because its beta value is less than 1 (0.43). The SBI Large Cap Fund
return will change by 0.43% when the market return increases or decreases by 1%.
The fund exhibits low systematic risk because its beta value shows that the fund
delivers consistent results with minimal response to market fluctuations.

The alpha value for the SBI Large Cap Fund turned out to be 0.00636. Alpha measures
the additional return a fund produces after market risk factors have been eliminated.
According to the positive alpha measurement the fund achieved returns which exceed
the Capital Asset Pricing Model (CAPM) predicted returns based on its beta value.
The positive alpha obtained in this analysis shows that the SBI Large Cap Fund
generated returns which exceeded expected market-adjusted return during the study
period. The fund has outperformed its market benchmark because it possesses a
positive alpha and a beta value which remains below one. The fund management
strategy enables the company to deliver extra earnings which they achieve by
controlling their market exposure to calculated risk levels. The fund provides
consistent returns to investors because its prices hardly fluctuate when compared to
the entire market index.

24
 Adjusted Close Monthly Returns
Date BSE100 NIPPON RET BSE100 RET. NIPPON
Jan-22 17618.04 55.13
Feb-22 17043.27 54.00 -3.26% -2.05%
Mar-22 17723.94 52.72 3.99% -2.36%
Apr-22 17574.51 55.13 -0.84% 4.55%
May-22 16887.92 51.56 -3.91% -6.46%
Jun-22 16014.13 50.92 -5.17% -1.24%
Jul-22 17530.28 53.32 9.47% 4.71%
Aug-22 18222.39 57.58 3.95% 7.97%
Sep-22 17574.98 58.52 -3.55% 1.63%
Oct-22 18405.94 58.40 4.73% -0.20%
Nov-22 19081.7 60.78 3.67% 4.07%
Dec-22 18425.17 61.08 -3.44% 0.50%
Jan-23 17935.75 61.00 -2.66% -0.12%
Feb-23 17538.2 60.03 -2.22% -1.59%
Mar-23 17601.67 59.83 0.36% -0.34%
Apr-23 18324.96 58.63 4.11% -2.00%
May-23 18909.41 60.27 3.19% 2.80%
Jun-23 19571.34 65.90 3.50% 9.34%
Jul-23 20150.32 69.35 2.96% 5.23%
Aug-23 19764.93 70.38 -1.91% 1.49%
Sep-23 20123.3 72.54 1.81% 3.07%
Oct-23 19558.03 71.59 -2.81% -1.32%
Nov-23 20718.71 72.18 5.93% 0.82%
Dec-23 22384.89 78.09 8.04% 8.20%
Jan-24 22509.19 80.82 0.56% 3.49%
Feb-24 22921.27 83.15 1.83% 2.89%
Mar-24 23294.04 90.37 1.63% 8.68%
Apr-24 23759.67 87.69 2.00% -2.97%
May-24 23771.04 88.88 0.05% 1.35%
Jun-24 25397.77 92.68 6.84% 4.27%
Jul-24 26438.85 97.16 4.10% 4.83%
Aug-24 26726.58 97.37 1.09% 0.22%
Sep-24 27338.6 100.28 2.29% 2.99%
Oct-24 25526.3 98.16 -6.63% -2.11%
Nov-24 25546.61 95.74 0.08% -2.47%
Dec-24 25061.75 97.95 -1.90% 2.31%
Jan-25 24626.67 93.37 -1.74% -4.67%
Feb-25 22978.78 90.65 -6.69% -2.91%
Mar-25 24577.8 90.37 6.96% -0.31%
Apr-25 25375.24 93.05 3.24% 2.96%
May-25 25940.24 97.78 2.23% 5.09%
Jun-25 26762.83 100.42 3.17% 2.70%
Jul-25 25961.78 101.31 -2.99% 0.88%
Aug-25 25556.76 100.83 -1.56% -0.47%
Sep-25 25810.92 102.54 0.99% 1.69%
Oct-25 26988.8 103.82 4.56% 1.25%
Nov-25 27414.82 104.70 1.58% 0.85%
Dec-25 27344.72 104.88 -0.26% 0.17%
Jan-26
26536.38 105.40 -2.96% 0.49%

25
 Table 4.5: Return Summary Table

BSE 100 - NIPPON y = 0.00974 + 0.48x

R^2 = 0.27619
12.0000%
10.0000%
8.0000%
6.0000%
4.0000% Series 1
NIPPON

2.0000%
0.0000%
-2.0000%
%

0%

%
00

00

00

00

00

00
00
-4.0000%
00

00

00

00

00

00
0
.

0.

0.

0.

0.
50

00

50
-6.0000%
-5

10

15
-1

-1

-8.0000%
BSE 100

Interpretation

The regression analysis between the BSE 100 benchmark index and the Nippon India
Large Cap Fund returns demonstrates how market movements impact fund
performance. The regression equation which the analysis produced is expressed as:

Y = 0.00974 + 0.48X

The equation shows that Y represents the Nippon India Large Cap Fund return while
X denotes the BSE 100 index return. The fund's beta value is 0.48, which indicates
that the Nippon India Large Cap Fund exhibits less price fluctuations than the overall
market because its value remains below one. If the BSE 100 index changes by 1% it
leads to a 0.48% change in the fund return that will move in the same direction. The
fund's beta suggests it carries less systematic risk. Consequently, its prices are less
prone to move in tandem with overall market fluctuations. Moreover, the alpha value
of 0.00974 shows the fund's ability to generate returns above what would be
expected, considering the market risk it takes on. A positive alpha indicates that the
fund outperformed the returns anticipated by the Capital Asset Pricing Model
(CAPM).

26
The Nippon India Large Cap Fund created extra value through its effective portfolio
management and investment solutions. The coefficient of determination shows that
R² results in a value of 0.27619 which explains that 27.6% of the Nippon India Large
Cap Fund returns variation occurs because of BSE 100 index movements while other
factors like fund management decisions and sector allocation and economic
conditions impact the remaining variation. The R² value currently shows a moderate
level because benchmark index movements impact the fund performance yet
multiple elements beyond market index control the return outcomes.

27
 Adjusted Close Monthly Returns
Date BSE100 SBI RET BSE100 RET. SBI
Jan-22 17618.04 66.90
Feb-22 17043.27 64.66 -3.26% -3.35%
Mar-22 17723.94 62.98 3.99% -2.59%
Apr-22 17574.51 65.42 -0.84% 3.87%
May-22 16887.92 61.26 -3.91% -6.35%
Jun-22 16014.13 60.37 -5.17% -1.46%
Jul-22 17530.28 62.77 9.47% 3.98%
Aug-22 18222.39 67.07 3.95% 6.84%
Sep-22 17574.98 67.64 -3.55% 0.85%
Oct-22 18405.94 66.93 4.73% -1.04%
Nov-22 19081.7 69.90 3.67% 4.43%
Dec-22 18425.17 70.21 -3.44% 0.45%
Jan-23 17935.75 70.12 -2.66% -0.13%
Feb-23 17538.2 69.06 -2.22% -1.51%
Mar-23 17601.67 68.85 0.36% -0.31%
Apr-23 18324.96 66.97 4.11% -2.73%
May-23 18909.41 69.06 3.19% 3.12%
Jun-23 19571.34 74.54 3.50% 7.93%
Jul-23 20150.32 77.59 2.96% 4.10%
Aug-23 19764.93 77.07 -1.91% -0.67%
Sep-23 20123.3 78.69 1.81% 2.10%
Oct-23 19558.03 77.82 -2.81% -1.11%
Nov-23 20718.71 78.21 5.93% 0.51%
Dec-23 22384.89 83.36 8.04% 6.58%
Jan-24 22509.19 84.94 0.56% 1.89%
Feb-24 22921.27 84.89 1.83% -0.05%
Mar-24 23294.04 92.96 1.63% 9.50%
Apr-24 23759.67 88.51 2.00% -4.78%
May-24 23771.04 89.85 0.05% 1.51%
Jun-24 25397.77 94.33 6.84% 4.98%
Jul-24 26438.85 98.40 4.10% 4.31%
Aug-24 26726.58 98.80 1.09% 0.41%
Sep-24 27338.6 102.71 2.29% 3.95%
Oct-24 25526.3 100.97 -6.63% -1.69%
Nov-24 25546.61 97.84 0.08% -3.10%
Dec-24 25061.75 99.10 -1.90% 1.28%
Jan-25 24626.67 95.46 -1.74% -3.67%
Feb-25 22978.78 93.36 -6.69% -2.20%
Mar-25 24577.8 92.96 6.96% -0.44%
Apr-25 25375.24 95.46 3.24% 2.69%
May-25 25940.24 100.03 2.23% 4.79%
Jun-25 26762.83 101.84 3.17% 1.82%
Jul-25 25961.78 103.24 -2.99% 1.37%
Aug-25 25556.76 101.49 -1.56% -1.70%
Sep-25 25810.92 102.63 0.99% 1.13%
Oct-25 26988.8 104.08 4.56% 1.41%
Nov-25 27414.82 105.51 1.58% 1.37%
Dec-25 27344.72 106.27 -0.26% 0.72%
Jan-26 26536.38 107.33 -2.96% 1.00%
Table 4.6: Return Summary Table

28
 BSE 100 - SBI y = 0.00636 + 0.43x
R2 = 0.24142
12.0000%
10.0000%
8.0000%
6.0000%
4.0000% Series 1
BSE 100

2.0000%
0.0000%
-2.0000%
%

0%

%
00

00

00

00

00

00
-4.0000%

00
00

00

00

00

00

00
0
.

0.

0.

0.

0.
-6.0000%
50

00

50
-5

10

15
-1

-1

-8.0000%
SBI

Interpretation

The BSE 100 benchmark index, when analysed through regression, reveals the
connection between market swings and the performance of the SBI Large Cap Fund.
The regression equation obtained from the analysis is:
Y = 0.00636 + 0.43X
which shows that the SBI Large Cap Fund return depends on BSE 100 index return.
The fund's returns show a responsiveness level of 0.43 which means that the returns
will change according to benchmark index movements. The beta of the SBI Large Cap
Fund is less than 1, which means that its price changes are less volatile than the market
as a whole. The Fund will experience a return change of 0.43% which follows the
same movement pattern as the index when the BSE 100 index changes by 1%. The
fund shows lower systematic risk according to its beta value which means that it
experiences smaller price changes when compared to the benchmark index.
The alpha value of 0.00636 represents the excess return generated by the fund after
adjusting for market risk. With help of the Capital Asset Pricing Model (CAPM), it
was predicted that the fund would do well, which then led to higher-than-expected
returns. Therefore, the fund generated extra returns through its successful portfolio
management throughout the research period. The coefficient of determination (R² =
0.24142) shows that BSE 100 index movements can explain about 24.1% of SBI Large
Cap Fund return variations while other factors including portfolio diversification and
sector allocation and management strategies account for the rest of the variations. The

29
R² value shows moderate results because the benchmark index affects fund
performance but multiple other factors determine the fund's returns. The analysis
results show that SBI Large Cap Fund maintains low market sensitivity while
producing positive returns above market expectations. The fund shows two
performance characteristics which include stable performance delivery and market
risk-based return generation that exceeds expected levels. The performance evaluation
of SBI Large Cap Fund demonstrated that the fund maintained its usual performance
standards while delivering returns which surpassed its expected market-based
performance.

30
4.2 Findings
Looking at the two large-cap funds side by side over the study period, the return figures
alone paint a fairly telling picture. Nippon India Large Cap Fund posted overall returns
of around 14%, while SBI Large Cap Fund managed roughly 9% — against a BSE
100 benchmark return of approximately 10%. On the surface, one fund beat the market
and the other did not, but the implications run a little deeper than that. Large-cap funds
are notoriously difficult to manage actively, simply because their holdings tend to
mirror the index to a significant degree. The fact that Nippon India still managed to
pull ahead says something about the quality of its stock selection and timing during
this period. SBI's inability to match even the benchmark, on the other hand, raises a
fair question — one that fund selectors and retail investors alike might want to sit with
— about whether the costs and decisions involved in active management were actually
working in investors' favour.

The volatility numbers, though, complicate the picture in an interesting way. Monthly
return standard deviation came out to 3.27% for SBI and 3.37% for Nippon India, and
both of these sits below the volatility the BSE 100 itself displayed over the same
window. So, neither fund was particularly wild in how its returns moved month to
month. Beta values — 0.43 for SBI and 0.48 for Nippon India — land well below 1.0,
which is broadly consistent with what you would expect from funds that are not trying
to amplify market moves. Both schemes absorbed market direction without fully
mirroring its intensity, which is something moderate-risk investors tend to value, even
if it rarely makes headlines.

The sharper contrast between the two funds only becomes visible once you move into
risk-adjusted territory. Nippon India's Sharpe Ratio of approximately 0.60 dwarfs
SBI's 0.15 — and that is not a small gap. When a fund's Sharpe Ratio is this much
higher, it means investors were getting considerably more return for every unit of
volatility they were sitting with. The Treynor Ratio mirrors this gap almost exactly:
0.15 for Nippon India, 0.04 for SBI. Whether you look at total risk or systematic risk,
the same conclusion keeps emerging. Jensen's Alpha was positive for both — 0.00974
for Nippon India and 0.00636 for SBI — meaning neither fund was simply coasting
on beta exposure; both generated something above what CAPM would have predicted.

31
Regression outputs supported a positive relationship between the BSE 100 and each
fund's returns, though the moderate R² figures across both suggest the index was never
the whole story — fund-level decisions clearly played a role in shaping outcomes.

What does all of this mean practically? For investors, perhaps the most useful
takeaway is that raw returns can be genuinely misleading when evaluated in isolation.
A fund that earns 14% with half the volatility of one earning 12% is doing something
meaningfully different — and better — for the investor sitting on the other side of it.
Metrics like the Sharpe and Treynor ratios, and alpha estimates, are not just academic
constructs; they capture something real about the experience of holding a fund through
uncertain stretches. Comparing against a benchmark before investing is similarly non-
negotiable — not to chase outperformance obsessively, but simply to understand what
you are actually paying for. Large-cap funds, as this study suggests, remain a sensible
home for investors who want equity exposure without the sharper drawdowns that
mid- and small-cap portfolios can bring. For fund managers, the gap between these
two schemes is instructive in its own right — thoughtful diversification and deliberate
allocation decisions do show up in the numbers over time, and SBI's figures relative
to Nippon India's are a reasonable illustration of that. Extending this kind of analysis
to a broader fund sample and longer timeframes would naturally strengthen the
conclusions, and that seems like a worthwhile direction for future work in this space.

32
4.3 Limitations of the Study

The research findings about the performance of selected large-cap mutual funds show
useful results but require researchers to accept certain research boundaries. The study
investigates only two large-cap mutual fund schemes which include Nippon India
Large Cap Fund and SBI Large Cap Fund. The results of this study are not applicable
to all Indian large-cap mutual funds because different asset management companies
operate the mutual fund industry through their various investment plans. Furthermore,
the analysis covers the years 2022 to 2026. Economic changes market shifts and new
regulations all drive the different time-based performance patterns that mutual funds
exhibit. The study needs extra time to assess fund performance because longer periods
deliver superior knowledge about fund operations.

The research depends on secondary data which researchers collected from financial
platforms that include Yahoo Finance and BSE India and Groww and AMC websites.
The sources hold widespread use and trustworthiness between researchers but the
results depend on how accurate the reported data was. Adding on to that, the research
primarily examines performance through quantitative metrics which include Beta and
Standard Deviation and Sharpe Ratio and Treynor Ratio and Jensen's Alpha and
Regression analysis. The analysis excluded qualitative factors which included fund
management strategy and expense ratios and investor behaviour and market sentiment.
Lastly, the study measures mutual fund performance through a single comparison to
the BSE 100 benchmark index. Performance assessment capabilities will improve
through the use of additional benchmark indices together with mutual fund category
comparisons.

33
CHAPTER 5: CONCLUSION
The researchers conducted their study to assess and compare the performance of two
chosen large-cap equity mutual funds in India, which include Nippon India Large Cap
Fund – Direct Growth and SBI Large Cap Fund – Direct Plan Growth. The research
team analyzed the historical Net Asset Value (NAV) data from 2022 to 2026 and used
various financial ratios plus statistical tools which included Beta and Standard
Deviation and Sharpe Ratio and Treynor Ratio and Jensen’s Alpha and Linear
Regression. The research results show that both mutual funds maintained stable
performance while their volatility levels stayed below the benchmark BSE 100 index.
The beta values of both funds showed results below one which demonstrated that both
funds displayed lower market risk because their market sensitivity decreased. The
comparative analysis showed that the Nippon India Large Cap Fund performed better
than its competitors during the study period.

Investors in Nippon India got more — not just in raw return terms, but when
performance is measured against the risk the fund was actually carrying. The Sharpe
Ratio and Treynor Ratio both came out stronger for Nippon India than for SBI, and
Jensen's Alpha was higher too, which in practical terms means the fund was generating
excess returns beyond what its level of market risk exposure would have predicted.
Taken together, these figures point in the same direction. The regression analysis
further indicates a positive relationship between the returns of the mutual funds and
the benchmark index. The results indicate that mutual fund performance depends on
market movements and other factors as well. The study demonstrates that large-cap
mutual funds offer investors stable investment options which they can use to invest in
the equity market. Among the two funds analysed, the Nippon India Large Cap Fund
exhibited comparatively stronger performance in terms of return generation and risk-
adjusted efficiency during the study period.

34
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