Active Mutual Funds fails to beat their benchmark returns
Active Mutual funds again slipped to beat their benchmark returns in 2020. As per the source, up to 81% of large-cap equity indices underperformed the S&P BSE 100 index. On the other hand, ELSS funds, Mid-cap, Small-cap, and government bond funds also underperformed to its benchmark indices over the one year.
Further, Equity markets raised after the pandemic. According to the source, in the last year, S&P BSE 100 raised 16.84% with 80.65% of funds underperforming the benchmark. During the second half of 2020, 100% of the funds failed to beat the benchmark S&P BSE 100.
During the same period, S&P BSE 200 index raised 17.92%. It outperformed 65.12% of the actively managed funds in the category. Likewise, S&P BSE 400 Mid and Small-cap Index reported a 26.76% gain at the end of December 2020. Moreover, 67% of the mid and small-cap funds deserted to follow such progress.
Besides, Fixed income securities like government bond funds had also failed as compared to the S&P BSE India government bond index. At that time, 90% of composite bond funds failed the performance of the S&P India Bond Index.
Over the 3-year and 5-year period, 87% of large-cap funds underperformed their benchmark indices BSE 100. Whereas in 3-year and 10-year time period, 35% of mid and small-cap equity schemes performed better than their benchmark. Nevertheless, in a 5-year period, 54% of mid and small-cap funds underperformed to indices. However, 100% of the large-cap funds, 80% of the ELSS funds, and 53% of the mid-cap and small-cap funds underperformed their corresponding benchmarks.