About 50% of equity mutual funds outperformed benchmarks; small caps fare better

Just over 50% of stock plans have beaten their benchmarks in this calendar year so far, according to data from Value Research, a mutual fund tracking firm. According to the data, as many as 461 equity mutual funds, out of some 905 schemes, beat their respective benchmarks between January and mid-November.

Equity schemes such as Quant Small Cap Fund and Quant Infrastructure Fund have returned over 80% each in this calendar year. The return since the beginning of the year (YTD) of their benchmark indices has been in the range of 39 to 56%.

Kotak Small Cap Fund, Principal Small Cap Fund, Tata Small Cap Fund, Nippon India Small Cap Fund, Canara Robeco Small Cap Fund, BOI AXA Small Cap Fund and Edelweiss Small Cap Fund are among the best performing funds of the year, each yielding a return of over 60% this year so far.

Small-cap funds fared better, as most of the best-performing equity funds fall into the small-cap category. Out of 53 small-cap funds, no less than 33 have beaten their benchmarks this year. In other words, about 62% of small-cap companies beat their benchmarks, according to data from Value Research.

Small Cap Plans

Mid-cap plans have performed relatively poorly over the current year. Out of 59 mid-cap plans, only 23 plans managed to beat their benchmarks. This means that only 39% of mid-cap plans outperformed their benchmarks.

Mid Cap Funds

The performance of large cap funds was moderate. Of 191 large-cap equity programs, only 43 could beat their benchmark. In percentage terms, nearly 23% of large-cap plans could beat their benchmark, according to data available with Value Research.

Top Large Cap Plans

Fund managers and wealth advisors point out that the performance of the equity plans has been in line with expectations.

“I would say mutual fund performance as a whole has been in line with expectations if you compare it to more mature markets like the US. It’s common to see even 80% of actively managed funds underperforming their benchmarks in mature markets,” said Suvajit Ray, Chief Product Officer, IIFL Securities.

Jharna Agarwal, Head of Products at Anand Rathi Preferred, also highlights the role of fund managers in outperforming benchmarks.

“Overall, equity mutual funds have performed well this year. Many fund managers have been very nimble in their portfolio construction strategy. emerging trends seem to have worked in favor of equity funds,” Agarwal said.

Equity mutual fund investors should keep in mind that the market can remain volatile in the short term, fund advisers warn.

“After the supernormal returns we have seen over the past 18 months (more than 100% in large caps and 200% in mid and small caps), it is important that investors moderate their expectations of returns from equity investments. to a longer-term average kind of returns that this asset class has given – around 12% to 15% per year,” Ray said.

“Investors with a long-term investment horizon of 5+ years can continue to hold their investments in equity mutual funds. Additionally, SIPs are still a good way to build a mutual fund corpus of equity investment,” he said.

Dolores W. Simon