Experts suggest to keep low-cost Nifty 50 index fund at core of portfolio

If risk appetite permits, consider active midcap and smallcap funds, and factor funds in satellite portfolio

S&P Dow Jones cap Indices recently published the S&P Indices Versus Active Funds (SPIVA) India scorecard for the year ending December 2023. Over a five-year horizon, 85.7 per cent largecap funds failed to beat their benchmarks. The number was lower at 58.1 per cent for the mid/smallcap category.

 

Key takeaways

Active funds are struggling to beat their benchmarks, especially over longer horizons. “To think that just by investing in active funds you will be able to enjoy alpha is incorrect. Do not ignore passive funds just because they give returns similar to their benchmark,” says Siddharth Srivastava, head-ETF (exchange-traded fund)