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Over half of the schemes in categories like sectoral and thematic funds, small cap funds and value funds have beaten their benchmarks by a good margin.
An analysis of the 5-year performance of active equity funds ending on December 2023 across fund categories shows that only a few schemes in categories like large cap, flexi cap, mid cap and ELSS are able to beat their respective benchmarks.
On the other hand, 80% of dividend yield funds have beaten their respective benchmarks handsomely in 5-year period. Also, over half of the schemes in categories like sectoral and thematic funds, small cap funds and value funds have outperformed their benchmarks by a good margin.
Let us look at the report card of active equity funds based on their 5-year performance ending December 2023:
Large cap
Our analysis shows that 28% of large cap funds have outperformed their benchmark in a 5-year period. The alpha ranges between 0.10% and 1.11%. In terms of performance, ICICI Prudential Bluechip Fund, Baroda BNP Paribas Large Cap Fund and Nippon India Large Cap Fund are the top three performers.
Large and midcap funds
In this category, 24% of the large and midcap funds have outperformed their benchmark. Of the 21 schemes, 5 schemes have beaten their benchmarks in the range of 0.30% and 2.68%. Quant Large and Mid Cap Fund has outperformed its benchmark by a margin of 2.68%. HDFC Large and Mid Cap Fund and Axis Growth Opportunities Fund are the other two schemes in this category with outperformance by a margin of 0.94% and 0.67%, respectively.
Mid cap
Of the total 22 mid cap funds, 22% or 5 mid cap funds have beaten their benchmarks. Quant Mid Cap Fund, Nippon India Growth Fund and PGIM India Midcap Opportunities Fund are the top three funds in terms of performance. The outperformance ranges between 0.16% and 3.84%.
Small cap
76% or 13 out of 17 small cap funds have beaten their benchmark handsomely. The outperformance ranges between 0.01% and 9.50% for a five-year period. Quant Small Cap Fund has outperformed its benchmark by a margin of 9.50%. Bank of India Small Cap Fund and Nippon India Small Cap Fund have also generated alpha by healthy margin of 7.62% and 5.67%, respectively.
Flexi cap
Close to 35% of the total flexi cap funds have generated excess returns over their respective benchmarks. Quant Flexi Cap Fund, Parag, Parikh Flexi Cap Fund and JM Flexicap Fund are the top three funds in the category with the highest outperformance. The outperformance ranges between 0.83% and 9.16%.
ELSS
36% of ELSS funds has beaten their benchmark in a 5-year period. Quant ELSS Tax Saver Fund, Bank of India ELSS Tax Saver Fund and DSP ELSS Tax Saver Fund are the top three ELSS in terms of performance.
Sectoral and thematic
56% of the sectoral and thematic funds have outperformed their benchmark in the range between 0.12% and 10.44%. Quant Infrastructure Fund, Edelweiss Recently Listed IPO Fund and Sundaram Services Fund are the top three funds in this space with benchmark margin of 10.44%, 8.91% and 7.44%.
Focused
4 out of 10 focused funds have generated alpha in 5 years. 360 ONE Focused Equity Fund, Quant Focused Fund and HDFC Focused 30 Fund are the top three focused funds in this category.
Value
Over half of the value funds have beaten their benchmarks. JM Value Fund, ICICI Prudential Value Discovery Fund and Nippon India Value Fund are the top three funds in terms of performance. The outperformance ranges between 0.23% and 4.27%.
Click here to see the complete list of funds. Outperformers are marked in yellow.
