InvestorQ : How did the large cap funds perform in the year 2020? How many of these funds got better of the index?
indhumathi Sayani made post

How did the large cap funds perform in the year 2020? How many of these funds got better of the index?

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3 weeks ago
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The truth is that for the third year in a row, large cap funds predominantly lagged the Nifty. A recent survey highlighted that 81% of large-cap funds gave returns lower than the TRI Nifty benchmark. In 2020, large cap funds gained smartly post-March, but overall show was below the index. In fact, the underperformance on an average was to the extent of around 2.7% compared to the TRI index.

One reason for this underperformance is given as Kurtosis. Typically, big returns are concentrated in a handful of large caps like RIL, Infosys, ICICI Bank, TCS etc. But, funds are limited to owning up to 10% in one stock. But that may not be the reality. Even if you look at large cap funds over a 5 year period, the performance still falls short with 66% of large cap funds doing worse than the index.

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