"Evaluating The Financial Performance Of Leading Asset Management Companies In India: An Empirical Analysis Using Jensen's Measure"

Abstract

T

he Indian mutual fund industry has witnessed significant growth, with Asset Management Companies (AMCs) playing a crucial role in managing diverse portfolios to meet investors' financial goals. This study evaluates the performance of two leading AMCs in India—ICICI Prudential and Nippon India—over the last five years using Jensen's Alpha. This measure provides insights into how well the fund managers of these AMCs have generated risk-adjusted returns compared to the Nifty 50 benchmark. ICICI demonstrated more consistent performance, particularly during market downturns, while Nippon India showed higher volatility and frequent underperformance. Both AMCs had moments of significant outperformance, but ICICI's ability to navigate difficult market conditions was more pronounced, suggesting stronger fund management. The findings highlight the importance of evaluating AMC performance using risk-adjusted metrics like Jensen’s Alpha, which offers a comprehensive view of fund management efficiency.