Mutual Funds
Mutual Funds

NEW DELHI: Even before the COVID-19 worries-led market rout dented the value of mutual fund investments, there are chances that the fund was anyways under performing from a long-term perspective.

According to a study by S&P Indices Versus Active (SPIVA), for the five years ending December 2019, a majority of funds were under performing. Typically, asset management companies say one must invest in mutual funds for the medium to long-term and see through near-term volatilities.

However, massive correction of over 25% in the benchmarks over the last two months have made investors worried over the value of their portfolios.

The SPIVA study said 82.29% of equity large cap funds, 78.38% of the ELSS (equity linked savings scheme) funds and 40.91% of Mid/Small Cap equity funds under performed their respective indices in the five years.

If one feels that the condition of the portfolio would be better from a longer time horizon, Akash Jain, the associate director for global research at S&P Dow Jones Indices said majority of the actively managed large-cap equity funds in India under performed the S&P BSE 100 with 64.80% large-cap funds under performing over the 10-year ending in December 2019.

Over the one-year period ending December 2019, the S&P BSE 100 surged 10.92%, while 40% of the Indian Equity Large-Cap funds under performed the benchmark, it said.

Among all the categories evaluated in the SPIVA India Scorecard, the Mid-/Small- category fared the best for active funds with majority of them managing to beat the S&P BSE 400 MidSmallCap Index across different time horizons studied in the report.

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