Over 89% of large-cap MFs in India outperformed benchmarks in the long run: Report

In the same period, 27.45 per cent of Indian Mid/Small Cap and 75.61 per cent of Indian ELSS (Equity-Linked Savings Scheme) funds outperformed their respective benchmarks.

This is according to the S&P Indices vs Active Funds (SPIVA) India Scorecard, published by S&P Dow Jones Indices, a world index provider.

According to the report, the start of the year was particularly difficult for Indian equity large-cap managers, with 87.5% of funds in the underperforming category in H1 2022 following the SPIVA India Year-End 2021 Scorecard for the same period.

Benedek Voros, Director, Index Investment Strategy, S&P Dow Jones Index, said, “Although the Indian mid-cap benchmark had its worst H1 since 2013, managers operating in this category started the year on a grand note, with an underperformance rate of only 35.3. with. %, possibly benefiting from exposure to some of the big names in their portfolio.”

Across all the categories included in the SPIVA India Scorecard, Indian equity mid-/small-cap funds have outperformed in a long time, some of which have outperformed the S&P BSE 400 MidSmallCap Index in 10 years. The period ends in June 2022, the report said.

Spiva

It also highlighted that actively managed Government of India bond funds are on track for their best (i.e. lowest) underperformance rate since the inception of the India SPIVA Report in 2013. “After suffering a 79% underperformance rate as of SPIVA India Year-End 2021, just 22% of Indian Government Bond Funds lagged behind the S&P BSE India Government Bond Index in the first six months of 2022.”

The index provider noted that underperformance rates generally increased with the length of the period in which they were measured across geographies and categories. “Over a 10-year time period, over 60% of funds underperformed across categories outside Indian equity mid/small caps,” the report said.