Home Market 75% midcap, smallcap funds outperformed their benchmarks in 2018

75% midcap, smallcap funds outperformed their benchmarks in 2018


Despite broader market facing challenging environment in 2018, around 75 per cent actively managed midcap and smallcap equity funds outpaced their respective benchmarks for the full year.

On the other hand, just 8 per cent largecap funds outpaced their benchmarks during the same period.

A latest study by S&P Indices Versus Active (SPIVA) India Scorecard showed that 92 per cent of largecap equity funds underperformed their respective benchmark indices during the previous calendar year. The survey also showed that 25.6 per cent of midcap and smallcap equity funds and 81.6 per cent of government bond funds underperformed during the same period.

Moreover, more than 95 per cent and 88 per cent ELSS funds failed to outpace their respective benchmarks in the one-year period December 31 and three-year period, respectively. However, in the long run (five years) nearly 60 per cent of ELSS funds outpaced BSE 200 index.

“Over three-year period, 88.1 per cent ELSS Funds have underperformed their respective benchmarks and the return spread between the first and third quartile break points of the fund performance was 3.7 per cent over the 10-year period,” the release said.

Over the 10-year period, the return spread for actively managed largecap equity funds, between the first and the third quartile break points of the fund performance, stood at 3.4 per cent, pointing to a relatively large spread in fund returns.

Explaining the findings of the study, Akash Jain, Associate Director, Global Research & Design, S&P Dow Jones Indices said: “The largecap equity funds witnessed a low survivorship rate (66.7 per cent) over the 10-year period and a low style consistency (42 per cent) over the 1-year period ending in December 2018.”

Overall, the asset-weighted return for largecap equity funds waRead More – Source