Over Half of Indian Equity Large-Cap Funds Failed to Beat the Benchmark

Over half of Indian Equity Large-Cap funds failed to beat the benchmark, with 52 per cent of actively managed funds underperforming the S&P BSE 100, as per S&P Dow Jones Indices.

In 2023, performance among Indian active managers varied across categories. The underperformance rates among Indian Equity Large-Cap Funds were significantly high over the three- and five-year periods, at 87.5 per cent and 85.7 per cent, respectively.

S&P Indices Versus Active Funds (SPIVA) SPIVA India Scorecard compares the performance of actively managed Indian equity and bond mutual funds with their respective benchmark indices over 1-, 3-, 5- and 10-year investment horizons.

Indian ELSS funds fared the best, with just 30 per cent underperforming the S&P BSE 200.

Indian ELSS funds achieved the second-highest long-term survival rate across all categories with 73.0 per cent of them still surviving after 10 years, S&P Dow Jones Indices said.

The benchmark for Indian Equity Mid-/Small-Cap funds, the S&P BSE 400 MidSmallCap Index, rose 44.0 per cent in 2023, and 73.6 per cent of active managers underperformed the index over that period.

Among the equity categories included in the SPIVA India Scorecard, Indian Equity Mid-/ Small-Cap funds fared the worst in the long run, with 75.4 per cent of them lagging the S&P BSE 400 MidSmallCap Index over the 10-year period ending December 2023.

After a challenging 2022, 2023 saw a significant turnaround for global markets. India was among the leaders of the global stock market rally, with all observed equity benchmarks posting gains of over 20 per cent for the year.