More than 80 per cent of large-cap funds underperformed their benchmark

According to the S&P DJI SPIVA India Scorecard, more than 80 per cent of large-cap funds underperformed their benchmark. Continue reading to find out more.

Several kinds of research have been conducted throughout the world to explain why it is getting increasingly difficult for fund managers to create alpha over their benchmark indices. S&P Dow Jones Indices (S&P DJI) recently issued its S&P Indices Versus Active Funds (SPIVA) India Scorecard, which is one such research.

Over one-year, three-year, five-year, and ten-year investment timeframes, the agency compares the performance of actively managed Indian mutual funds to their respective benchmark indices in this scorecard. The performance of three types of actively managed equity funds and two categories of actively managed Debt Funds is primarily examined over 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 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 per cent during 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.”