S&P Dow Jones Indices, the world’s leading index provider, has revealed that 91 per cent of the large cap funds have underperformed their respective index in the one-year period ended June.

According to the report ‘S&P Indices Versus Active Funds India Scorecard’, 27 per cent of mid and small cap and 76 per cent of Equity Linked Savings Schemes (ELSS) have under-performed their respective benchmarks.

Performance of active managers was greatly mixed across categories in the first half of 2022. The beginning of the year was particularly tough for large cap equity managers with 87 per cent of funds in the category underperforming the S&P BSE 100 in the first half of this year. After holding up well in March quarter, equities plunged in June quarter.

Mid and small cap

Among all the categories, mid and small cap funds fared the best by far in the long run, with a slim majority of them managing to beat the S&P BSE 400 Mid-Small Cap Index over 10-year ended June.

Over the 10-year horizon, more than 60 per cent of funds underperformed in all categories outside the mid and small cap categories.

Benedek Voros, Director, Index Investment Strategy, S&P Dow Jones Indices, said although the mid-cap benchmark had its worst first half since 2013, active managers in the category had a great start to the year, with an under performance rate of just 35 per cent, possibly benefiting by exposure to a few larger names in their portfolios.

ELSS funds could boast the highest long-term survival rates across all categories in the SPIVA India Scorecard with 78 per cent of them still surviving after 10 years.

Govt bond funds

Meanwhile, after suffering a 79 per cent under performance rate last year, just 22 per cent of Government Bond funds lagged the S&P BSE India Government Bond Index in the first six months of this year. This put actively managed Government Bond funds on track for their lowest under performance rate since the inception of India SPIVA reports in 2013.

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