Underperformance high among Indian large-cap equity funds: Report
A majority of Indian large-cap equity funds have failed to outperform their benchmark in the recent periods, shows a report. As per S&P Dow Jones Indices’ SPIVA India Scorecard, 87.5% and 85.7% of large-cap funds underperformed the S&P BSE 100 index in 3 and 5 years to December 2023, respectively.
Over 52% lagged in the last year alone. In contrast, only 30% of Indian ELSS (Equity Linked Savings Scheme) funds fell short of the S&P BSE 200.
ELSS registered the second-best 10-year survival rate of 73% among categories. The report tracks the relative performance of actively managed mutual funds versus their benchmarks.
Three in four mid-cap and small-cap funds also trailed the S&P BSE 400 MidSmallCap index, which surged 44% in 2023. This segment fared the poorest over the long run.
The analysis covers a strong rebound in global and Indian equity markets after volatility in 2022. All domestic benchmarks gained over 20%, as per the report.
However, large sections of active managers in India still struggle to outperform the rising tide, indicating the challenges of stock picking in various market segments.
