Mid cap category was the worst hit in the last three years. Around 80% mid cap funds have underperformed against their respective benchmarks in the last three year period. There were around 25 mid cap funds in the said period and 20 schemes have failed to outperform their respective benchmarks.
The small cap funds were next in the list. Around 74% small cap funds have failed to beat their respective benchmarks in the last three years.Out of 23 small cap funds, 17 schemes failed to outperform their respective benchmarks. Around 69% each flexi cap fund and large & mid cap fund have underperformed against their respective benchmarks. Both categories had 26 funds each in the said period and around 18 funds each have underperformed in their respective categories.
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Around 16 focused funds have failed to beat their respective benchmarks. Around 64% large cap funds have underperformed against their respective benchmarks. Two categories – ELSS and multi cap funds – each had 56% of underperformance in the last three years.
The value funds had the lowest underperformance score of 19% in the last three years. Out of 16 value funds, 3 underperformed against their respective benchmarks.
Note, we excluded contra funds for the analysis as the category has only three schemes and all three schemes have outperformed their benchmarks in the last three years.
Underperformers in three years
Axis ELSS Tax Saver Fund, the largest ELSS fund based on assets managed, has failed its respective benchmark in the last three years. Mirae Asset ELSS Tax Saver Fund also has failed to beat its benchmark. The scheme gave 18.20% in the last three years against 20% offered by its benchmark (NIFTY 500 – TRI).
Parag Parikh Flexi Cap Fund, the largest flexi cap fund based on assets managed, failed to outperform its benchmark. The scheme gave 19.80% in the last three years against 20% offered by its benchmark (NIFTY 500 – TRI). Kotak Flexicap Fund and Motilal Oswal Flexi Cap Fund also failed to outperform against its benchmark. SBI Focused Equity Fund offered 14.61% return in the last three years against 19.99% by its benchmark (BSE 500 – TRI).
SBI Large & Midcap Fund delivered 21.63% return in the last three years compared to 23.11% return by the benchmark (NIFTY LargeMidcap 250 – TRI).
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SBI BlueChip Fund, a prominent large cap fund, gave 16.63% return in the said period against 17.94% by its benchmark (BSE 100 – TRI). Kotak Emerging Equity Fund, the second largest mid cap fund based on assets managed, gave 25.59% return against 29.14% by its benchmark (Nifty Midcap 150 – TRI).
SBI Small Cap Fund and HDFC Small Cap Fund offered 25.29% and 27.70% returns respectively in the similar time period against 28.71% return offered by its benchmark (BSE 250 Small Cap – TRI).
DSP Value Fund and Groww Value Fund offered 17.17% and 17.95% returns respectively against 20% return by NIFTY 500 – TRI. Quantum Long Term Equity Value Fund delivered 19.23% return in the last three years compared to 19.99% by its benchmark (BSE 500 – TRI).
We considered all equity mutual fund categories excluding contra funds. We considered regular and growth options. We calculated performance for the last three years.
Note, the above exercise is not a recommendation. The exercise was done to find which equity mutual funds have underperformed against their respective benchmarks in the last three years. One should not make investments or redemption decisions based on the above exercise.
One should always consider risk appetite, investment horizon, and goal before making investment decisions.
(Disclaimer: Recosmmendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)
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