"Mutual Fund Scheme Comparison - A Comparative Analysis of Two Small Cap Equity Funds"

This presentation provides an in-depth comparative analysis of two small-cap equity mutual funds: HSBC Small Cap Fund and Tata Small Cap Fund. The study evaluates their performance, risk parameters, and investment potential using key financial metrics such as NAV, Standard Deviation, Beta, Sharpe Ratio, and Jensen’s Alpha.

Additionally, the presentation highlights the role of SEBI in mutual fund regulation, the selection process for mutual funds, and the benchmark (Nifty Small Cap 250 TRI) used for comparison.

Key takeaways from this analysis include:
✔ Short-term, medium-term, and long-term performance comparisons
✔ Risk assessment through volatility and risk-adjusted return metrics
✔ A final recommendation on the better investment option

This presentation is useful for investors, finance students, and professionals looking to make informed decisions about investing in small-cap equity mutual funds.

📢 Ideal for MBA finance students, investment analysts, and mutual fund enthusiasts!

👉 Watch the full presentation and enhance your investment knowledge!

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1. Mutual Fund Scheme Comparison “A Comparative Analysis of Two Small Cap Equity Funds” – Bavisha Riya Kalpeshbhai

2. Introduction to Mutual Funds A mutual fund is a collection of investments that combines money from many investors to buy stocks, bonds, and other assets. Investors purchase fund shares, representing part ownership of the fund's assets.  How do Mutual Funds Work? A professional manages the fund and makes investment decisions. The fund's performance depends on the value of its assets. Investors share in the fund's profits and losses.

3. Literature Review ( Safiuddin, 2022) Financial intermediaries known as mutual funds assist investors in diversifying their holdings across different portfolios. They amass investors’ assets and allocate them to a diverse range of products, including money market instruments, equities, and bonds. India's mutual fund market has grown considerably. This study reviews 30 research articles to investigate the performance of equity-based mutual funds using peer-reviewed literature. The study thoroughly analyzes the elements that encourage investing in equity-based mutual funds, such as investment goals, time horizons, fund kinds, return on investment, and market volatility. A summary of studies on equity-based mutual funds is given by the findings.

4. Literature Review (Kumar, 2019) He made an effort to compare the performance of a few chosen equity mutual fund schemes in India and concluded that investing in mutual funds is a better choice if money is kept in them for a long time. Additionally, he concluded the analysis that, notwithstanding their volatility, lower-rated schemes yield higher returns than those with higher ratings. (D. Venu and N. Lakshmi Narayana, 2024) This study examines the performance of two well-known investing vehicles: mutual funds and small caps. Investors now have additional options thanks to internet platforms and passive investment. The results compare performance, costs, and risks to optimize investing methods. This aids investors in making well-informed choices that complement their risk tolerance and financial objectives. The study adds to the body of knowledge already in existence and has ramifications for both financial institutions and ordinary investors.

5. Literature Review References D. Venu and N. Lakshmi Narayana. (2024). A COMPARATIVE STUDY ON INVESTMENTS IN MUTUAL FUNDS AND SMALLCASE. International Journal of Research in Engineering , 70-78. Kumar, V. (2019). Performance Analysis of Select Equity Mutual Funds in India. RESEARCH REVIEW International Journal of Multidisciplinary , 1476-1479. Safiuddin, S. K. (2022). Performance Analysis of Equity-Based Mutual Funds in India: A Review of Selected Literature. Hyderabad.

6. Role of SEBI in Categorization SEBI(Securities Exchange Board of India) regulates mutual funds to ensure transparency and protect investor interests. As per SEBI guidelines on Categorization and Rationalization of scheme issued in October 2017, mutual fund schemes are classified as – Equity Schemes Debt Schemes Hybrid Schemes

7. Mutual Fund Scheme Selection:

8. Mutual Fund Schemes HSBC Small Cap Fund: Fund Manager: Venugopal Manghat/Cheenu Gupta NAV: 67.1182 Launched: May 12, 2014 Category: Equity Small Cap Fund Benchmark: Nifty Small Cap 250 TRI Tata Small Cap Fund: Fund Manager: Chandraprakash Padiyar/Jeetendra Khatri NAV: 33.6712 Launched: November 12, 2018 Category: Equity Small Cap Fund Benchmark: Nifty Small Cap 250 TRI

9. Returns Performance Comparison:

10. Returns Performance Comparison Short-Term Performance (1W & 1M): Both funds have experienced a decline in the last week and month , likely due to market volatility. HSBC Small Cap Fund has seen a steeper decline (-9.50% in 1M vs. -5.95% for Tata), indicating higher short-term volatility. 1-Year Performance: Tata Small Cap Fund has shown positive growth (1.51%), whereas HSBC Small Cap Fund is in negative territory (-6.04%) . This suggests Tata Small Cap Fund has managed market downturns better in the past year. Medium-Term Performance (3Y): Both funds have provided good returns, with Tata Small Cap Fund (19.12%) outperforming HSBC Small Cap Fund (16.14%) . Long-Term Performance (5Y): Over 5 years, both funds have delivered strong returns above 25%. Tata Small Cap Fund (26.16%) has performed slightly better than HSBC (25.08%), indicating better long-term compounding potential.

11. Risk Parameters Comparison Risk (Standard Deviation & Beta): Standard deviation measures the volatility of returns. The HSBC Small Cap Fund has a higher standard deviation (16.83) than Tata Small Cap Fund (15.24), indicating that HSBC is slightly more volatile. Beta represents the sensitivity of the fund compared to the market. HSBC has a beta of 0.87, while Tata has a beta of 0.78, suggesting that HSBC is more responsive to market movements, whereas Tata is slightly less risky. Risk-Adjusted Return (Sharpe Ratio): The Sharpe Ratio evaluates the return per unit of risk taken. Tata Small Cap Fund (0.81) has a higher Sharpe Ratio than HSBC (0.6), implying that Tata provides better returns for the assumed risk level. Excess Return (Jensen's Alpha): Jensen’s Alpha indicates the ability of the fund manager to generate returns beyond the expected market return. Tata Small Cap Fund has a significantly higher Jensen’s Alpha (3.93) compared to HSBC (0.61), suggesting superior performance by Tata’s fund in generating excess returns. Particular HSBC Small Cap Fund Tata Small Cap Fund Standard Deviation 16.83 15.24 Beta 0.87 0.78 Sharpe Ratio 0.6 0.81 Jensen's Alpha 0.61 3.93

12. Which is a better option to invest in Mutual Funds? I think Tata Small Cap Fund is the best scheme to invest in based on multiple factors: Lower Volatility & Risk : With a lower standard deviation (15.24) and beta (0.78) compared to HSBC, it is less volatile and more stable. Better Risk-Adjusted Returns : A higher Sharpe Ratio (0.81) means Tata offers better returns for the risk taken. Superior Fund Management : Jensen’s Alpha (3.93) indicates the fund manager has delivered strong excess returns beyond market expectations. Consistent Performance : Tata Small Cap Fund has performed better in the short term (1M decline of -5.95% vs. HSBC’s -9.50%) and also outperformed HSBC in 1-year, 3-year, and 5-year returns . Overall, for both short-term stability and long-term wealth creation, Tata Small Cap Fund is the better investment choice. However, if you are comfortable with higher risk and volatility, HSBC Small Cap Fund can still be an option.

13. Thank You!