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More than 50% large-cap equity funds underperform their benchmark indices

Also, only 37.21% Indian government bonds underperformed the index

Press Trust of India  |  Mumbai 

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More than 50 per cent of the large-cap and mid/small underperformed their respective benchmark indices for one year period ending June 30, says a report.

Asia Index's S&P Indices Versus Active (SPIVA) India Scorecard, 52.87 per cent of large-cap equity funds, 56.52 per cent of mid/small-cap underperformed their respective indices, in the past one year.

Large cap are compared against Large-Cap S&P 100 index, while mid/small cap equities are compared against S&P MidCap index.

Besides, 73.83 per cent of Indian composite bond funds also underperformed their index -- S&P India Bond Index.

"As of June 2007, there were 118 available for Out of these, 40 funds either merged or liquidated over the 10-year period ending June 30 2017 resulting in a survivorship rate of 66 per cent," Asia Index Associate Director (Global Research & Design) Akash Jain said.

"Additionally, 29 funds underperformed the 100, in other words 59 per cent of the funds underperformed the index," it added.

Meanwhile, only 37.21 per cent Indian government underperformed the index -- India Government Bond Index -- over a one year period ending June 30, 2017.

"Over the 10-year period, the return spread for the actively managed large-cap equity funds, between the first and the third quartile break points of the fund performance, stood at 3.11 per cent, pointing to a relatively large spread in fund returns," the report said.

"Owing to the volatile nature of the mid-/small-cap segment of the Indian equity market, the return spread for the actively managed mid-/small-cap equity funds was even higher at 4.17 per cent over the same period," it added.

First Published: Fri, October 06 2017. 00:32 IST
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