SPIVA which compares the performance of actively managed equity as well as debt mutual funds with the benchmark indices has come with a note.

Share Market Live

NSE

According to the report, there has been a big underperformance of actively managed funds compared to indices.

The report highlights that the large-cap index was up by 6 percent in 2022, but 88 percent of the active funds have underperformed.

When it comes to small and midcap funds, the index was up 2.2 percent in 2022 but the underperformers were around 55 percent in comparison to benchmark indices.

When you look at flows, the incremental money has been going to passive funds because of the underperformance of active funds.

Will active funds now make a comeback?

In a developing market like India, the bottom-up strategy could be rewarding. Active funds in times of volatility provide the best opportunity. In a growing economy like India, you will get select stocks that will do quite well and so this period of underperformance from active managers or active funds could be coming to an end.

Also Read: Full Circle Fin Planners recommends a 5-10% allocation to gold-based investments

First Published:Apr 14, 2023 9:27 PM IST