ASSESSMENT OF EQUITY LARGE CAP FUND MANAGEMENT: STUDY OF A COMBINATION OF PROACTIVE AND PASSIVE STRATEGIES

Abstract

Equity funds among the mutual funds have the ability to provide better returns but at the same time, the risk associated with these funds is greater due to volatile share prices. However, this risk can be reduced through diversification or investing in different shares. These funds are less expensive and have less liquidity as well. In context of active and passive funds, it can be stated that the total market return is based on both these types of funds. Overall the objective of the study is to evaluate the performance of active and passive strategies of investment in the equity large cup funds over the investment period of 10 years. The researcher has collected cross sectional data about the active equity large cap funds from the websites and data bases of Thailand related to finance. The analysis has been performed in context of descriptive statistics, correlation analysis and ranking of the funds. The mean annual return of the active funds was found to be 5.34% while the benchmark or passive funds was 4.90%. In context of risk adjusting performance, the active funds are found to outperform the passive funds as the sharpe ratio of active funds was 0.221 while that in the market is found to be 0.241. These values suggest that different active equity large cap funds have outperformed the passive benchmark.