How have large-cap funds fared on rolling return basis?

Dhuraivel Gunasekaran | Updated on October 24, 2019

Recently, there has been a lot of concern over the underperformance of the actively managed large-cap funds as a category against their benchmarks on a trailing return (point-to-point) basis.

However, trailing returns alone are not sufficient to gauge the performance. Rolling return, which is arrived at by multiple point-to-point returns across different time periods, gives a more comprehensive picture and is a better metric to assess the performance of funds over the long run.

While rolling returns suggest that large-cap funds are putting up a good fight, the overall performance is still disappointing. The one-year rolling return analysis (from 10 years NAV history) reveals that out of 28 large cap funds, just  4 outperformed their benchmarks over 70% of the time.

Three-year and seven-year rolling returns also paint a sombre picture, with only 8 and 10 large cap funds respectively, outperforming benchmarks more than 70% of the time.



Published on October 23, 2019

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