Around 60 equity mutual fund schemes have failed to beat their respective benchmarks in three, five, seven, and 10 year horizons, an analysis of performance showed. For the study, we considered the trailing returns of 146 equity schemes that have completed three years in the market.
These 60 schemes were from midcap, ELSS, large & mid cap, largecap, flexicap, focused fund, value fund, and small cap categories. Around 13 midcap schemes failed to beat their respective benchmarks in three, five, seven, and 10 year horizons. Around 12 ELSS funds, 10 large and mid cap, and largecap funds, six flexicap and focused funds, two value funds, and one small cap fund underperformed their benchmarks in all these horizons.
Axis ELSS Tax Saver Fund, the largest scheme in the ELSS category based on assets managed, failed to beat its benchmark in three, five, seven, and 10 year horizons. The scheme manages assets of Rs 34,299.84 crore.
We included only those equity schemes that have underperformed their benchmarks in all four horizons. Some schemes might have underperformed their respective benchmarks in any one, two, or three horizons but not all four chosen horizons.
We considered equity categories such as largecap, midcap, large & mid cap, smallcap, ELSS, flexicap, focused fund, value & contra fund for the study. We looked at the trailing returns for comparison. We compared the performance of the schemes with their current benchmarks. We considered regular and growth option schemes.
Note, we did not consider multi cap schemes because the data for benchmarks was not available for comparison.
Note, the above exercise is not a recommendation. The main purpose of the exercise was to find out how many equity schemes have underperformed their respective benchmarks in the three, five, seven, and 10-year horizons.
One should not make investment or redemption decisions based on the above exercise. Past performance does not guarantee future performance. One should always include risk appetite, investment horizon, and goal before making any investment.