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81% Of Indian ELSS Funds Underperformed: S&P Dow Jones Indices

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81% Of Indian ELSS Funds Underperformed: S&P Dow Jones Indices
Himali Patel - 22 October 2019

Mumbai, October 22: Over the one-year period ending June 2019, 80.95 per cent of Indian ELSS funds, 76.67 per cent of large-cap equity funds, 76.92 per cent of Indian Government Bond Funds and more than 95 per cent of Indian Composite Bond funds underperformed their respective indices, said the latest S&P Indices Versus Active (SPIVA) India scorecard,. “In fact, across all the periods studied, the majority of actively managed large-cap equity funds in India underperformed the S&P BSE 100. Large-cap funds witnessed a low style consistency of 16.67 per cent per cent over the ten-year period and a low survivorship rate of 68.33 per cent,” pointed out Akash Jain, Associate Director, Global Research & Design, S&P Dow Jones Indices.

The research further stated that over the one-year period, the S&P BSE 100 surged 9.79 per cent, with 76.67 per cent of funds underperforming the benchmark. In fact, across all the periods studied, the majority of actively managed large-cap equity funds in India underperformed the S&P BSE 100. “Large-cap funds witnessed a low style consistency of 16.67 per cent over the 10-year period and a low survivorship rate of 68.33 per cent. The asset-weighted fund return was 85 basis points (bps) higher than the equal-weighted fund return over the 10-year period, and the return spread between the first and the third quartile breakpoints of the fund performance was 2.98 per cent for the same period,” stated the report.

SPIVA India Scorecard compares the performance of actively managed Indian mutual funds with their respective benchmark indices over 1-, 3-, 5-, and 10-year investment horizons. The S&P Dow Jones Indices in this scorecard, studied the performance of three categories of actively managed equity funds and two categories of actively managed bond funds over the 1-, 3-, 5-, and 10-year periods ending in June 2019 to come to this conclusion.

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