Journal of Contemporary Issues in Business and Government

Abstract

The outbreak of Coronavirus has battered the Indian economy and IMF has projected that the
growth rate of India will contract by 4.5 percent in this fiscal year. The market sentiments over
the last few months have gone down. Financial markets are adversely affected by this pandemic
and the mutual fund industry is no more exception. The mutual fund industry is facing high
volatility due to this turmoil. This paper, therefore, aims to study empirically the impact of
COVID -19 on diverse aspects of different schemes of mutual funds. The paper is divided into
two parts i.e. the first part has analyzed mutual fund schemes from the perspective of several
folios, redemption/repurchase, and cash flows. The second part of the paper empirically drives
the impact of COVID-19 on various schemes of mutual funds by applying econometric dummy
variable regressions. The study concluded that COVID-19 has largely impacted the large-cap
schemes rather than mid and small-cap schemes. Further, funds i.e. DSP Midcap fund, Axis
Small-Cap, and Kotak Small-Cap funds had shown the positive impact of the crisis on the Net
Asset Values (NAVs) of the funds. Therefore, the investors long in other schemes could take a
short position in these schemes to get a considerable hedge against probable losses.