Most active fund managers of the mutual fund industry have once again failed to beat their respective benchmark despite the indices turning volatile due to global events in 2022.

Interestingly, less than one-third of active managers beat the benchmark in 2022, with 68 per cent of them underperforming the index.

According to the S&P Indices Versus Active Funds (SPIVA) India Scorecard for 2022 report, about 88 per cent of the actively managed large-cap equity funds have under-performed their benchmark S&P BSE 100 index in 2022. 

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In the same period, 55 per cent of actively managed mid- and small-cap equity funds have trailed their benchmark index -- S&P BSE 400 MidSmallCap Index , which increased by two per cent.

Similarly, 77 per cent of Equity-Linked Saving Schemes have under-performed their benchmark S&P BSE 200, which jumped by six per cent in 2022.

Over the 10-year time period, more than 60 per cent of the actively managed funds other than mid- and small-caps have under-performed their benchmark. In the same period, about 50 per cent of mid- and small-cap funds have beaten their benchmark S&P BSE 400 MidSmallCap Index.

According to the report, the S&P BSE India Government Bond Index increased by almost 3 per cent in 2022.  Indian Composite Bond Funds fared the best in the same period, with only 45 per cent under performing the S&P BSE India Bond Index.

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Benedek Voros, Director, Index Investment Strategy, S&P Dow Jones Indices said Indian markets fared far better than most global markets in 2022 though main equity and fixed income benchmark indices dropped in first half of the year and staged a remarkable recovery in the second half.

Tightening lending standards weighed more heavily on smaller firms, with the S&P BSE 500 MidSmallCap Index under performing the S&P BSE 200 by 4 per cent, the most since 2019, he said.

ELSS funds performance

The report also noted that Indian ELSS funds achieved the second-highest long-term survival rates across all categories in our SPIVA India Scorecard, with 78 per cent of them still surviving after 10 years.

Meanwhile, 77 per cent of Indian ELSS funds under performed the index. Over a 10-year period, some funds improved with 64 per cent under performing the benchmark.