InvestorQ : I have been investing in equity mutual funds for quite some time now. Can you tell me if the local large cap funds manage to outperform the indices on a consistent basis?
sara Kunju made post

I have been investing in equity mutual funds for quite some time now. Can you tell me if the local large cap funds manage to outperform the indices on a consistent basis?

Answer
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9 months ago


In the last couple of years, the equity funds are finding it increasingly difficult to beat the performance of the benchmark index. You may wonder if fund managers are losing their touch but that is phenomenon that is seen the world over where fund managers are struggling to beat the index on a consistent basis. That is more because markets getting more focused on macro stories and also because the kurtosis in the markets is making it hard to beat the markets on a consistent basis. If you look at the table below, you will get most of your answers.

Scheme Name

NAV

Regular

NAV

Direct

Return 1 Year (%)

Regular

Return 1 Year (%)

Direct

Return 1 Year (%)

Benchmark

Outperformance

in (%) terms

Axis Bluechip Fund

32.31

35.06

20.47

21.91

15.11

5.36

Canara Robeco Bluechip Equity Fund

27.28

29.22

17.28

18.78

12.64

4.65

BNP Paribas Large Cap Fund

98.25

106.12

19.25

20.63

15.11

4.14

DSP Top 100 Equity

227.45

237.78

16.54

17.33

12.64

3.90

LIC MF Large Cap Fund

29.48

31.37

16.86

17.93

13.52

3.34

L&T India Large Cap

29.15

30.67

14.91

15.86

12.64

2.27

HSBC Large Cap Equity Fund

227.97

240.32

17.26

18.28

15.11

2.15

IDBI India Top 100 Equity

25.99

28.04

14.59

16.25

13.52

1.07

PGIM India Large Cap Fund

180.07

196.54

16.05

17.48

15.11

0.95

Union Largecap Fund

11.42

11.66

13.52

14.31

12.64

0.88

Kotak Bluechip Fund

254.09

273.43

15.86

17.11

15.11

0.75

Mirae Asset Large Cap Fund

54.46

57.96

14.08

15.34

13.52

0.56

SBI Bluechip

41.73

44.40

13.13

13.97

12.64

0.49

Baroda Large Cap

15.41

16.18

13.98

14.83

13.52

0.45

IDFC Large Cap Fund

34.13

36.70

12.16

13.20

12.64

-0.48

UTI Mastershare

129.39

134.96

12.13

13.01

12.64

-0.51

Indiabulls Bluechip

22.78

25.29

13.73

15.32

15.11

-1.38

Edelweiss Large Cap Fund

37.86

39.87

13.29

14.73

15.11

-1.82

Essel Large Cap Equity Fund

24.33

26.67

13.17

15.07

15.11

-1.94

ICICI Prudential Bluechip Fund

44.76

47.54

11.57

12.28

13.52

-1.96

Taurus Largecap Equity Fund

78.13

82.15

10.32

10.60

12.64

-2.31

Invesco India Largecap Fund

30.06

33.40

11.62

13.26

15.11

-3.48

Tata Large Cap Fund

232.73

253.49

13.87

14.90

17.44

-3.58

Nippon India Large Cap Fund

35.78

38.07

8.87

9.78

12.64

-3.77

HDFC Top 100 Fund

502.37

525.83

9.23

9.84

13.52

-4.29

Aditya Birla Sun Life Frontline Equity

233.88

248.98

9.30

10.07

15.11

-5.81

Franklin India Bluechip

471.84

500.14

6.47

7.32

13.52

-7.06

JM Large Cap Fund

68.35

73.66

5.48

6.50

17.44

-11.97

How to interpret the table above? Clearly, it looks like a 50-50 chance of beating the indices with equity funds. However, even where the beating is visible, anything less than 1% is not very meaningful. You can probably be better off by sticking to passive funds like index funds or index ETFs which can certainly give you a much better advantage of mirroring the index and the low cost of ETFs can work to you advantage at a time when beating the index is so tough.