Market Timing Ability of Selected Mutual Funds in India : A Comparative Study

The objective of this paper is to explore the market timing ability of selected Indian mutual fund managers, which is a vital aspect in the success of a mutual fund. In order to measure the market timing ability of the fund managers, two important models, namely Treynor and Mazuy and Henriksson and Merton, have been used with the BSE Sensex and NSE Nifty as market proxies. The results indicate that a majority of the selected mutual fund scheme managers are not seriously engaged in any market timing activities and are relying mainly on stock selection skills. Further, fund managers of private sector exhibited better market timing as per Henriksson and Merton model. These results are similar to those reported by other researchers utilizing data from Indian mutual funds. The results reported here are also in line with those for the developed capital markets.