Eighty-six percent of large-cap equity schemes of mutual funds underperformed the indices during the one year to June 2021, which witnessed one of the strongest rallies in the markets, a report said on Monday.

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The scenario was not different in mid-cap and small-cap schemes of MFs either, which witnessed 57.1 per cent of the schemes trailing the movement in the respective benchmarks, S&P Indices Versus Active (SPIVA) said in its half-yearly report.

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Markets have had a phenomenal run since April 2020, fuelled by easy liquidity conditions created the world over following the pandemic, and concerns have been raised about the financial market euphoria being de-linked from actual economic activity on the ground.

The report said over longer horizons as well, majority of the actively managed funds in India underperformed their respective benchmarks.

Over a five-year period ending in June 2021, 82.7 per cent of large-cap, 76.2 per cent of small/mid-cap and 69.6 per cent of equity linked saving schemes underperformed their respective benchmarks.

Besides, 71.4 per cent of Indian government bond and 97.9 per cent of Indian composite bond funds underperformed their respective benchmarks over a five-year period ending in June 2021, it added.