large-cap funds: White elephants! Over 89% large-cap MFs are underperformers: S&P Dow Jones Indices – Blue Barrows

In the last five years, over 89% large-cap mutual funds in India have underperformed the benchmarks, revealed a report released by S&P Dow Jones Indices.

The beginning of the year was particularly tough for Indian equity large-cap managers, with 87.5% funds in the category underperforming in H1 2022 following S&P Indices Versus Active Funds (SPIVA) India Year-End 2021 Scorecard for the same period, it said in a release.

“Although the Indian mid-cap benchmark had its worst H1 since 2013, active managers in the category had a great start to the year, with an underperformance rate of just 35.3%, possibly benefiting by exposure to a few larger names in their portfolios,” Benedek Voros, Director, Index Investment Strategy, S&P Dow Jones Indices said.

As per the SPIVA India Scorecard, on an absolute return basis, the S&P BSE 100 index outperformed 89% Indian equity large-cap funds in the last 5 years and 90.91% such funds in the last one year.

Whereas, on a risk-adjusted return basis, the S&P BSE 100 Index outperformed 81.25% and 90.91% Indian equity large-cap funds in the last 5 years and 1 year, respectively.

The SPIVA India Scorecard reports on the performance of actively managed Indian mutual funds compared to their respective benchmark indices over 1, 3, 5 and 10-year investment horizons.