Analysis: Actively managed large-cap funds or Nifty 100 TRI?

Analysis: Actively managed large-cap funds or Nifty 100 TRI?

Henil Shah

A lot of studies have been carried out around the world showing the failure of actively managed large-cap funds to beat its benchmark. Continue reading to learn more.

Actively managed Large-Cap funds invest majority of their assets in top 100 stocks by market capitalisation. According to the Securities and Exchange Board of India (SEBI), actively managed large-cap funds should invest at least 80 per cent of their assets in top 100 companies by market capitalisation.

 

According to the S&P Indices Versus Active Funds (SPIVA) scorecard, “In the first half of 2022, performance among Indian active managers was greatly mixed across categories. There was an unusually high underperformance rate in Indian Equity Large-Cap funds, where 88 per cent of actively managed funds underperformed the S&P BSE 100, and an unusually low proportion—just 19 per cent—of Indian Composite Bond funds underperformed the S&P BSE India Bond Index.”

 

 

Further in this article, we have made a detailed performance comparison between actively managed large-cap funds or Nifty 100 Total Returns Index (TRI).

 

Scheme Name

Trailing Returns (%)

Since Launch

YTD

1 Year

3 Years

5 Years

10 Years

Nippon India Large Cap Fund

11.52

-0.70

16.01

21.69

11.70

14.41

HDFC Top 100 Fund

17.75

-0.52

14.32

21.82

11.55

12.89

PGIM India Large Cap Fund

17.20

-1.71

11.08

15.82

9.51

12.08

SBI Blue Chip Fund

11.33

-1.75

10.74

19.54

11.07

14.03

Edelweiss Large Cap Fund

13.27

-0.75

10.49

17.97

11.75

13.36

ICICI Pru BlueChip Fund

13.83

-2.31

10.16

20.82

11.89

13.89

DSP Top 100 Equity Fund

18.32

-1.63

10.12

13.70

8.44

10.26

JM Large Cap Fund

8.74

-1.78

9.36

16.04

9.87

11.04

Kotak Bluechip Fund

18.63

-1.92

9.04

19.11

11.76

12.87

Indiabulls Blue Chip Fund

10.05

-3.44

8.69

13.65

8.34

10.51

Sundaram Large Cap Fund

17.37

-3.51

7.92

16.04

11.13

11.96

ABSL Frontline Equity Fund

18.77

-2.85

7.73

18.81

10.26

13.15

Tata Large Cap Fund

15.16

-2.55

7.68

18.02

10.66

11.97

HSBC Large Cap Fund

18.55

-2.70

7.55

16.52

10.11

11.49

Canara Robeco Bluechip Equity Fund

11.90

-2.03

6.92

17.51

13.23

13.23

Mirae Asset Large Cap Fund

14.73

-2.74

6.90

17.90

11.37

15.52

IDBI India Top 100 Equity Fund

13.50

-2.78

6.88

19.24

11.49

12.89

ITI Large Cap Fund

7.54

-3.24

5.98

-

-

-

Union Large Cap Fund

8.62

-3.05

5.74

17.52

9.61

-

Mahindra Manulife Large Cap Fund

11.37

-3.34

5.70

17.50

-

-

Taurus Large Cap Equity Fund

9.98

-6.83

4.95

13.76

7.33

8.84

Franklin India BlueChip Fund

18.25

-2.38

4.89

17.84

9.08

11.06

UTI Master Share

12.77

-3.05

4.03

17.41

10.96

12.61

Invesco India Large Cap Fund

11.31

-2.46

3.36

16.28

9.95

12.51

IDFC Large Cap Fund

9.84

-2.28

3.09

15.90

10.09

10.86

BANK OF INDIA Bluechip Fund

1.89

-3.73

3.00

-

-

-

LIC MF Large Cap

5.49

-3.83

2.09

12.81

10.09

11.46

Baroda BNP Paribas Large Cap Fund

5.56

-2.09

-

-

-

-

Quant Large Cap Fund

-5.88

-6.92

-

-

-

-

WhiteOak Capital Large Cap Fund

-8.20

-4.70

-

-

-

-

Axis BlueChip Fund

11.46

-4.28

-1.44

11.20

11.28

12.94

Category Average

11.43

-2.71

7.47

17.16

10.60

12.41

NIFTY 100 TRI

16.89

-3.77

9.27

17.76

11.99

13.04

 

Particulars

Since Launch

YTD

1 Year

3 Years

5 Years

10 Years

No. of Funds Outperform Benchmark

8

26

8

11

1

7

Total Funds

31

31

28

26

25

24

 

As can be seen in the above table, since launch, only 8 out of 31 funds were able to outperform its benchmark. In fact, in 5-year trailing period only 1 out of 25 funds outperformed Nifty 100 TRI.

 

Final Thoughts

As can be seen from the above analysis, actively managed large-cap funds are hardly able to beat Nifty 100 TRI. So, does it mean that you should shrug off investing in large-cap funds? No, you can still invest in them, however, you need to actively manage your investments in large-cap funds. Having said that, you should have sizable large-cap allocation to passive funds.

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