Mutual fund performance prediction

It is increasingly seen that non parametric frontier method has become a popular method in predicting the performance of investment fund. This paper uses the non-parametric method to analyze the efficiency and performance of mutual funds. The methodology uses Data Envelopment Analysis (DEA) to predict the performance of fund in coming years. Factor such as mutual fund returns, turnover rate, volatility, expense ratio are used to find the relative efficiency of funds using DEA. The end result not only provides funds with good return but at the same time these funds are consistent in performance and stable in nature. The methodology is applied to a sample of 46 Indian equity funds over the period 2006-2015. The time frame for implementing this analysis is three, five, and ten years evaluation respectively. The results are obtained on the basis of comparison with crisil and value research rating system. Our results provide practical application for investor to choose the best fund among all. It also help fund manager in better management of funds.