As many as 58 per cent of large-cap funds failed to beat their benchmark BSE-100 index in the first half of calendar year, according to S&P Dow Jones Indices’ SPIVA India Mid-Year 2023 report.
On the other hand, the Equity Linked Savings Scheme (ELSS) funds had an excellent start to the year with only 18 per cent underperforming the S&P BSE 200.However, underperformance rates in large-cap funds remained high over three- and five-year periods, at 86.2 per cent and 92.9 per cent, respectively.
The SPIVA (S&P Indices versus Active Funds) report showcases performance of active managers in the country across categories of funds from January to June 2023. The S&P BSE 400 mid/small cap index rose 12.4 per cent in the first half of 2023, 45.3 per cent of active managers underperformed the index over that period.
“Among all the fund categories included in the SPIVA India Scorecard, equity mid/small cap funds fared the best over a 5-year horizon, with only 38.1 per cent of funds underperforming the S&P BSE 400 mid/small cap index,” the report said.
The S&P BSE 400 mid/small cap index performance stood out as it delivered twice the total return of the S&P BSE 200 and outperformed the S&P BSE 100 by over 5 per cent.
In addition, the S&P BSE India (composite) bond Index rose 4.6 per cent in the first half of 2023, but the underperformance rates of Indian composite bond fund managers were the highest across all categories in the SPIVA India Scorecard, at 95.7 per cent.
Meanwhile, the S&P BSE India Government Bond Index increased 4.7 per cent in the first half of 2023. Fewer than one-sixth of active managers beat the benchmark over the period, with an underperformance rate of 85.2 per cent.