Over 82% large cap funds underperformed their benchmark

Over 82% large cap funds underperformed their benchmark

by 5paisa Research Team Last Updated: Apr 23, 2022, 05:45 PM IST

S&P DJI recently revealed its SPIVA India Scorecard indicating over 80% of the large cap funds have underperformed its benchmark. Read on to find out more.

There have been studies carried out around the globe explaining how it is becoming difficult for fund managers to generate alpha over their benchmark indices. One such study is by S&P Dow Jones Indices (S&P DJI) which recently released its S&P Indices Versus Active Funds (SPIVA) India Scorecard.

In this scorecard, the agency compares the performance of actively managed Indian mutual funds with their respective benchmark indices over one-year, three-year, five-year and ten-year investment horizons. Chiefly the performance is studied of three categories of actively managed equity funds and two categories of actively managed bond funds over the one-year, three-year, five-year and ten-year periods ending in December 2021.

Akash Jain, Associate Director, Global Research & Design, S&P Dow Jones Indices stated, “Over the one-year period ending December 2021, mid-cap/small-cap was the best performing fund category amongst the equities covered in the SPIVA India Scorecard. The benchmark for this category, the S&P BSE 400 MidSmallCap Index, was up 51% the same period. Though, market participants in this category of active funds may have witnessed a wider spread in fund returns as the difference in the first & third quartile fund was 19 per cent thus presenting fund selection challenges.”

Percentage of Funds Outperformed by the Index 

(Based on Absolute Return) 

Fund Category 

Comparison Index 

1-Year (%) 

3-Year (%) 

5-Year (%) 

10-Year (%) 

Indian Equity Large-Cap 

S&P BSE 100 

50.00 

70.00 

82.26 

67.61 

Indian ELSS 

S&P BSE 200 

26.83 

63.41 

79.07 

58.33 

Indian Equity Mid-Cap/Small-Cap 

S&P BSE 400 MidSmallCap Index 

50.00 

46.51 

58.14 

56.06 

Indian Government Bond 

S&P BSE India Government Bond Index 

79.17 

53.85 

76.19 

88.00 

Indian Composite Bond 

S&P BSE India Bond Index 

61.74 

90.91 

88.32 

100.00 

Source: SPIVA India Scorecard Year End 2021. Data as of December 31, 2021. 

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SENSEX
52,973.84
180.22 (0.34%)
Nifty 50
15,842.30
60.15 (0.38%)
Nifty Bank
33,597.60
476.25 (1.44%)

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