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Earlier in the 1960s, though they were aware of the concept of risk, the portfolio managers did not know as to how to measure and hence their performance was measured only in terms of rate of return. Though quite a few measures were developed in 1960s, it was Friend, Blume and Crockett who developed a mechanism to group portfolios into similar risk class. This in fact helped the portfolio managers to compare the performance of various funds more meaningfully in terms of risk-return relationship. Keeping the importance of two sides of investment coin: the Risk and the Return, we, in this paper attempted to analyze the performance of equity linked and diversified funds. We also tested if the portfolio managers' stock selection ability enhanced the performance. We have used measures like Treynor's, Sharpe's, Jensen's Alpha, the Information Ratio and Net Selectivity. Using these measures, we attempted to find out if the portfolio managers could generate above-average rate of return for a given risk class. The sample comprised equity linked savings and diversified funds in Indian context. The analysis was done on quarterly, half yearly, yearly and five yearly basis for each fund. This facilitated us to identify if the time factor played a role in the performance of a given fund. The results revealed that the performance of the fund managers primarily depended on the type of measure. While the fund(s) performed better according to a given method, than that of others in a given risk class, it was vice versa according to other measures. This reveals that the selection of performance measure matters a lot while assessing the performance of a fund. Analysis of Variance (ANOVA) revealed that the performance of a fund depended on time factor also. The results of our study carry very significant implications with respect to portfolio performance analysis.

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