Over half of India's large-cap funds disappointed investors last year
Despite a strong year for the Indian stock market in 2023, more than half of the country's equity Large-Cap funds failed to outperform the S&P BSE 100 index, according to a report by S&P Dow Jones Indices. The report, titled "S&P Indices Versus Active Funds (SPIVA(r)) India Scorecard," indicates that many actively managed funds did not meet their respective benchmarks across various categories. However, the Equity Linked Savings Scheme (ELSS) funds were an exception, with a majority outperforming their benchmark.
ELSS funds shine, mid/small-cap funds struggle in 2023
In contrast to the underperformance of large-cap funds, 70% of ELSS funds managed to outperform their benchmark (S&P BSE 200) across all measured time horizons (1, 3, 5, and 10 years). However, the performance of Equity Mid/Small-Cap funds was less impressive with a staggering 74% falling short of the S&P BSE 400 MidSmallCap Index in the same year. This category also recorded its worst long-term performance over the past decade.
Bond funds struggle to surpass benchmarks in 2023
A staggering 96% of Indian Composite Bond funds and 82% of Indian Government Bond funds failed to surpass their respective benchmarks. Despite the S&P BSE India Government Bond Index seeing an increase of 7.9%, less than one-fifth of active managers in this category managed to beat this benchmark. The underperformance by Indian Composite Bond fund managers was the highest across all categories on the SPIVA India Scorecard at a rate of 96%.
