INSUBCONTINENT EXCLUSIVE:
Despite broader market facing challenging environment in 2018, around 75 per cent actively managed midcap and smallcap equity funds outpaced
their respective benchmarks for the full year.
On the other hand, just 8 per cent largecap funds outpaced their benchmarks during the same
period.
A latest study by SP Indices Versus Active (SPIVA) India Scorecard showed that 92 per cent of largecap equity funds underperformed
their respective benchmark indices during the previous calendar year
The survey also showed that 25.6 per cent of midcap and smallcap equity funds and 81.6 per cent of government bond funds underperformed
during the same period.
Moreover, more than 95 per cent and 88 per cent ELSS funds failed to outpace their respective benchmarks in the
one-year period December 31 and three-year period, respectively
Funds have underperformed their respective benchmarks and the return spread between the first and third quartile break points of the fund
largecap equity funds, between the first and the third quartile break points of the fund performance, stood at 3.4 per cent, pointing to a
relatively large spread in fund returns.
Explaining the findings of the study, Akash Jain, Associate Director, Global Research Design, SP
72 basis points higher than the equal-weighted return over the 10-year period
During the same period, the asset-weighted return of Indian Equity micap and smallcap funds was 91 basis points higher than their
benchmarks.
In line with the historically volatile nature of broader market, the return spread for actively managed midcap and smallcap
equity funds was even higher at 5.3 per cent in the past 10 years, the release added.
The SPIVA India Scorecard reports on the performance
of actively managed domestic mutual funds compared to their respective benchmark indices over one-, three-, and five-year horizons.
