Active funds see performance rebound
PremiumMid- and small-cap schemes fared better on returns against their benchmarks, the SPIVA India scorecard shows
NEW DELHI : Indian active funds saw a big rebound in their performance last year, as 50% of equity large-cap schemes outperformed their benchmark in the one-year period ending December 2021, according to the latest S&P Indices Versus Active Funds (SPIVA) India scorecard.
However, long-term underperformance remained intact as 82.26% large-cap funds failed to beat their benchmark (S&P BSE 100) and 79.07% of ELSS funds underperformed S&P BSE 200 on a five-year basis. Moreover, 68% of large-cap funds underperformed their benchmark over the 10-year period.
Mid- and small-cap schemes fared better on returns against their benchmarks. About 50% of such schemes underperformed S&P BSE 400 MidSmallCap Index on a one-year basis, 58.14% failed to beat returns of benchmarks over the five years.
The report also noted that 54.55% of large-cap, 39.02% of active ELSS, and 37.25% of active mid- and small-cap funds underperformed their benchmarks in the six months ending December 2021.
The SPIVA India scorecard reports on the performance of actively managed Indian mutual funds compared with their benchmark indices over one-, three-, and five-year investment horizons.
For the one-year period ended June 2021, SPIVA’s last scorecard had shown that 86.2% of Indian equity large-cap funds and 53.7% of the ELSS funds underperformed their benchmarks.
“Over the one-year period ending December 2021, mid- and small-cap was the best performing fund category among equities covered in the SPIVA India Scorecard. The benchmark for this, the S&P BSE 400 MidSmallCap Index, was up 51% the same period. However, market participants in this category of active funds may have witnessed a wider spread in fund returns as the difference in the first and third quartile fund was 19% thus presenting fund selection challenges," said Akash Jain, associate director, global research and design, S&P Dow Jones Indices.