Analysis: Actively managed large-cap funds or Nifty 100 TRI?
A lot of studies have been carried out around the world showing the failure of actively managed large-cap funds to beat its benchmark. Continue reading to learn more.
Actively managed Large-Cap funds invest majority of their assets in top 100 stocks by market capitalisation. According to the Securities and Exchange Board of India (SEBI), actively managed large-cap funds should invest at least 80 per cent of their assets in top 100 companies by market capitalisation.
According to the S&P Indices Versus Active Funds (SPIVA) scorecard, “In the first half of 2022, performance among Indian active managers was greatly mixed across categories. There was an unusually high underperformance rate in Indian Equity Large-Cap funds, where 88 per cent of actively managed funds underperformed the S&P BSE 100, and an unusually low proportion—just 19 per cent—of Indian Composite Bond funds underperformed the S&P BSE India Bond Index.”
Further in this article, we have made a detailed performance comparison between actively managed large-cap funds or Nifty 100 Total Returns Index (TRI).
|
Scheme Name
|
Trailing Returns (%)
|
|
Since Launch
|
YTD
|
1 Year
|
3 Years
|
5 Years
|
10 Years
|
|
Nippon India Large Cap Fund
|
11.52
|
-0.70
|
16.01
|
21.69
|
11.70
|
14.41
|
|
HDFC Top 100 Fund
|
17.75
|
-0.52
|
14.32
|
21.82
|
11.55
|
12.89
|
|
PGIM India Large Cap Fund
|
17.20
|
-1.71
|
11.08
|
15.82
|
9.51
|
12.08
|
|
SBI Blue Chip Fund
|
11.33
|
-1.75
|
10.74
|
19.54
|
11.07
|
14.03
|
|
Edelweiss Large Cap Fund
|
13.27
|
-0.75
|
10.49
|
17.97
|
11.75
|
13.36
|
|
ICICI Pru BlueChip Fund
|
13.83
|
-2.31
|
10.16
|
20.82
|
11.89
|
13.89
|
|
DSP Top 100 Equity Fund
|
18.32
|
-1.63
|
10.12
|
13.70
|
8.44
|
10.26
|
|
JM Large Cap Fund
|
8.74
|
-1.78
|
9.36
|
16.04
|
9.87
|
11.04
|
|
Kotak Bluechip Fund
|
18.63
|
-1.92
|
9.04
|
19.11
|
11.76
|
12.87
|
|
Indiabulls Blue Chip Fund
|
10.05
|
-3.44
|
8.69
|
13.65
|
8.34
|
10.51
|
|
Sundaram Large Cap Fund
|
17.37
|
-3.51
|
7.92
|
16.04
|
11.13
|
11.96
|
|
ABSL Frontline Equity Fund
|
18.77
|
-2.85
|
7.73
|
18.81
|
10.26
|
13.15
|
|
Tata Large Cap Fund
|
15.16
|
-2.55
|
7.68
|
18.02
|
10.66
|
11.97
|
|
HSBC Large Cap Fund
|
18.55
|
-2.70
|
7.55
|
16.52
|
10.11
|
11.49
|
|
Canara Robeco Bluechip Equity Fund
|
11.90
|
-2.03
|
6.92
|
17.51
|
13.23
|
13.23
|
|
Mirae Asset Large Cap Fund
|
14.73
|
-2.74
|
6.90
|
17.90
|
11.37
|
15.52
|
|
IDBI India Top 100 Equity Fund
|
13.50
|
-2.78
|
6.88
|
19.24
|
11.49
|
12.89
|
|
ITI Large Cap Fund
|
7.54
|
-3.24
|
5.98
|
-
|
-
|
-
|
|
Union Large Cap Fund
|
8.62
|
-3.05
|
5.74
|
17.52
|
9.61
|
-
|
|
Mahindra Manulife Large Cap Fund
|
11.37
|
-3.34
|
5.70
|
17.50
|
-
|
-
|
|
Taurus Large Cap Equity Fund
|
9.98
|
-6.83
|
4.95
|
13.76
|
7.33
|
8.84
|
|
Franklin India BlueChip Fund
|
18.25
|
-2.38
|
4.89
|
17.84
|
9.08
|
11.06
|
|
UTI Master Share
|
12.77
|
-3.05
|
4.03
|
17.41
|
10.96
|
12.61
|
|
Invesco India Large Cap Fund
|
11.31
|
-2.46
|
3.36
|
16.28
|
9.95
|
12.51
|
|
IDFC Large Cap Fund
|
9.84
|
-2.28
|
3.09
|
15.90
|
10.09
|
10.86
|
|
BANK OF INDIA Bluechip Fund
|
1.89
|
-3.73
|
3.00
|
-
|
-
|
-
|
|
LIC MF Large Cap
|
5.49
|
-3.83
|
2.09
|
12.81
|
10.09
|
11.46
|
|
Baroda BNP Paribas Large Cap Fund
|
5.56
|
-2.09
|
-
|
-
|
-
|
-
|
|
Quant Large Cap Fund
|
-5.88
|
-6.92
|
-
|
-
|
-
|
-
|
|
WhiteOak Capital Large Cap Fund
|
-8.20
|
-4.70
|
-
|
-
|
-
|
-
|
|
Axis BlueChip Fund
|
11.46
|
-4.28
|
-1.44
|
11.20
|
11.28
|
12.94
|
|
Category Average
|
11.43
|
-2.71
|
7.47
|
17.16
|
10.60
|
12.41
|
|
NIFTY 100 TRI
|
16.89
|
-3.77
|
9.27
|
17.76
|
11.99
|
13.04
|
|
Particulars
|
Since Launch
|
YTD
|
1 Year
|
3 Years
|
5 Years
|
10 Years
|
|
No. of Funds Outperform Benchmark
|
8
|
26
|
8
|
11
|
1
|
7
|
|
Total Funds
|
31
|
31
|
28
|
26
|
25
|
24
|
As can be seen in the above table, since launch, only 8 out of 31 funds were able to outperform its benchmark. In fact, in 5-year trailing period only 1 out of 25 funds outperformed Nifty 100 TRI.
Final Thoughts
As can be seen from the above analysis, actively managed large-cap funds are hardly able to beat Nifty 100 TRI. So, does it mean that you should shrug off investing in large-cap funds? No, you can still invest in them, however, you need to actively manage your investments in large-cap funds. Having said that, you should have sizable large-cap allocation to passive funds.