73% of Indian large cap & 82% of mid and small-cap funds have underperformed over a 10-year period..!

The S&P Indices Versus Active (SPIVA) scorecard shows that the majority of Indian equity funds across categories have underperformed their global benchmarks over long durations.

Indian large-cap Funds..!

According to the SPIVA scorecard released by S&P Dow Jones Indices, 73% of Indian large-cap and 82% of Indian mid and small-cap funds have underperformed their benchmarks over a 10-year period. Over a 5-year period, this underperformance rate rises to 90%.

In terms of mid and small-cap funds, 82% of these funds underperformed their benchmarks over a 10-year period. If returns are analysed over a 5-year period, the proportion of underperforming funds drops to 67%, showing better performance compared to large-cap funds.

The study has compared the performance of Indian large cap funds with S&P India Large & Mid Cap Index and mid and small cap funds with S&P India Small Cap Index.

ELSS funds..!

For the ELSS category, Indian ELSS funds underperformed the S&P India Global Broad Market Index at rates of 68% over 5 years and 87% over 10 years.

The underperformance of Indian funds persists even in government funds with 97% of funds underperforming the iBox ALBI India Index, over a 10-year period and 59% underperforming over a 5-year period.

Indian composite bond funds also showed 59% underperformance over 5 years and 97% over 10 years compared to the iBox ALBI India Index.

Risk-adjusted returns..

When risk is considered, 72% of large-cap funds underperformed the S&P India Large & Mid Cap Index over a 5-year period while 75% underperformed over a 10-year period.

In comparison, only 24% of Indian mid and small-cap funds underperformed the S&P India Small Cap Index over 5 years while 48% underperformed over 10 years.

For ELSS, the underperformance rates are 61% over 5 years and 89% over 10 years.