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
Answer
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.