77 Percent Equity MFs Fail To Outperform

Almost 77 percent of Equity MFs have underperformed their respective benchmarks in the past one year.

A vast majority of the equity schemes including multicap, largecap, large and midcap, midcap, smallcap, value, and focussed mutual fund schemes have not performed well and could not outperform their respective benchmarks in the past one year.

Even though the period of one year is not the right time to assess the performance of equity mutual fund schemes, you can identify the trend using the annual review of your MF portfolio.

To be specific, about 81 percent multicap schemes failed to beat their benchmark returns. About 91 percent largecap schemes underperformed their benchmarks. Also, about 85 percent large and midcap schemes and focussed schemes failed to surpass their respective benchmarks. Moreover, 59 percent midcap schemes and 23 percent smallcap schemes failed to beat their respective benchmarks.

Based on mutual fund advisors’ opinions, investors are actually confused about the underperformance of Equity MFs as this is being witnessed when the broader benchmark indices are at their all-time high.

Investors are worried about the underperformance of their schemes, particularly when the Sensex and Nifty 50 are at their all-time peak, said Anil Rego, Founder of Right Horizons, a Wealth Management Company.

They are curious to know why their investment schemes are not performing when the broader indexes are at their all-time high, added Rego. In fact, several mutual fund advisors say they are flooded with calls from worried investors.

It might look surprising that the MF schemes are struggling to beat their respective benchmarks while the broader indices are marching forward every day. But actually, the broader indices are shooting up primarily because of some of the stocks in them.

Overall, in the past one year, the mutual fund managers are stressed to beat the benchmark of their Equity MFs, according to The Economic Times.

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