86% of Indian large-cap funds outperform their benchmark: Report

These are the findings of the latest S&P Index vs Active (SPIVA) India Scorecard Report, compiled every six months by index provider S&P Dow Jones Index.

The report also showed that over a long period of time, most of the actively managed funds in India underperformed their respective benchmarks.

In the five-year period ending June 2021, 82.7%, 76.2% and 69.6% of Indian equity large-cap, ELSS (tax saver funds) and mid-/small-cap funds underperformed their respective benchmarks.

“Over the one-year period ending June 2021, mid-/small-cap was the best-performing fund category among the equity categories included in this scorecard, with the S&P BSE 400 Mid-SmallCap Index up 90.6%. While market participants investing in this category of funds may have seen fund returns widely, during this period, the difference in first and third quartile fund returns was up to 27.9%, posing fund selection challenges for investors. was doing,” said Akash Jain. Associate Director, Global Research and Design, S&P Dow Jones Index.

Over a five-year period, asset-weighted returns lagged their respective benchmark returns in each of the Indian equity categories: large-cap funds (26 bps), ELSS funds (138 bps) and mid-/small-cap funds (198 bps). up to bps).

In addition, 71.4% and 97.9% of Government of India Bonds and Indian Composite Bond Funds underperformed their respective benchmarks in the five-year period ending June 2021.

The SPIVA India Scorecard reports on the performance of actively managed Indian mutual funds compared to their respective benchmark indices over one-, three- and five-year investment horizons. With this edition of the scorecard, the index provider has introduced style consistency of funds and carried forward the study over the 10-year period ended December 2018.

The previous report, which was released in April, showed that 81 per cent of large cap funds underperformed their benchmark in the past one year ended December 2020. Also, 67% of mid- and small-caps and 65% of ELSS were beaten by them. Benchmark as of December 2020