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Tipping Point: Are you aware of large-cap funds' survivorship bias?

Why is it important to keep survivorship bias in mind?

illustration: binay sinha
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Illustration: Binay Sinha

Business Standard
Survivorship represents the percentage of funds that are still active at the end of a period compared to the number present at its start. In the table given below, large-cap funds had the least survivorship among equity categories at about 78 per cent over the five-year period . 

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Why is it important to keep survivorship bias in mind? Because it skews past returns of funds to look better than they actually are. Over a period of time, the

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First Published: Oct 30 2019 | 11:11 PM IST

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