Out of 248 equity mutual funds,149 equity mutual funds have failed to outperform their respective benchmarks. In other words, only 99 equity mutual funds managed to beat their respective benchmarks.
Small cap and mid cap categories were the worst hit. Both the categories had more than 85% underperformance. Around 88% small cap mutual fund schemes failed to beat their respective benchmark in FY 24 so far. Out of 24 small cap schemes, 21 schemes have failed to beat their respective benchmarks.
Nippon India Small Cap Fund, the largest scheme in the small cap category based on assets managed, failed to beat its respective benchmark. The scheme offered 48.64% in FY24 against 57.30% by its benchmark (Nifty Smallcap 250 – TRI). SBI Small Cap Fund underperformed against its benchmark. Kotak Small Cap Fund also failed to beat its respective benchmark.
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Around 86% mid cap schemes underperformed against their respective benchmarks.There were around 29 mid cap schemes in the market and 25 schemes failed to beat their respective benchmarks.
HDFC Mid-Cap Opportunities Fund, the largest scheme in the mid cap category based on assets managed, underperformed against its benchmark in FY24. Kotak Emerging Equity Fund, the second largest scheme in the mid cap category based on assets managed, failed to beat its benchmark. The scheme offered 33.34% against 50.82% by its benchmark (Nifty Midcap 150 – TRI).
Focused fund category had an underperformance of 77%. SBI Focused Equity Fund underperformed against its benchmark.
ELSS or tax-saving fund category had 61% underperformance. Out of 38 ELSS schemes in the market, 23 ELSS schemes underperformed against their benchmarks. Parag Parikh ELSS Tax Saver Fund failed to outperform its benchmark in FY2024.
Multi cap category had 47% underperformance. Large cap category had 43% underperformance. Out of 30 large cap schemes in the market, 13 large cap schemes have underperformed their benchmarks in FY24. Aditya Birla SL Frontline Equity Fund underperformed against its benchmark. SBI BlueChip Fund offered 25.04% against 30.51% by its benchmark (S&P BSE 100 – TRI).
We considered all equity categories such as large cap, small cap, mid cap, large & mid cap, ELSS, flexi cap, focused fund, multi cap, value fund, and contra fund categories. We considered regular and growth options.
We calculated returns during the financial year 2023-24 starting from April 1, 2023 to March 20, 2024.
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Note, the above exercise is not a recommendation. The exercise was done to find how the equity mutual fund categories performed against their respective benchmarks in FY24.
One should not make investment or redemption decisions based on the above exercise. Past performance does not guarantee future performance. You should not choose schemes based on one year’s performance.
One should always consider risk appetite, investment horizon, and goal before making any investment decisions.