12,224.55-127.8
Stock Analysis, IPO, Mutual Funds, Bonds & More

50% equity mutual funds underperform their benchmark in 2019

​Though 2019 numbers show some improvement over 2018, the average returns from all the mutual fund categories can still frustrate most mutual fund investors.

, ET Online|
Dec 09, 2019, 11.23 AM IST
0Comments
Getty Images
bharat bond ETF
Around 160 out of 323 equity mutual fund schemes failed to beat their benchmark in 2019. The data looks grim, but it is relatively better than 2018 calendar year. In 2018, 76% equity mutual fund schemes couldn’t beat their benchmark.

The value-oriented equity mutual fund category was the worst performer of the year. Around 77% schemes that follow the value investing strategy underperformed their benchmark. The value fund category is underperforming for the second consecutive year. In 2018, 92% value-oriented schemes failed to beat their respective benchmarks. The category, on average, generated 1.83% in 2019 vs -8.70% in 2018.

ELSS and multi cap mutual fund schemes stood next in the list of laggards with 63% and 53% of the schemes in the respective categories underperforming the benchmark. However, except for one tax saving scheme, all other schemes in both the categories have given positive returns in 2019. On an average, the multi cap category generated 8.74% in 2019, much better than -6% average returns in 2018.

Other categories like large cap mutual funds had 55% of their schemes underperforming their respective benchmarks. One third of large & mid cap funds also underperformed their benchmark indices.

Large cap funds, on an average, generated 11% returns in 2019 as against 3% average returns in 2018.

Mid cap mutual fund category on an average offered 4.5% returns in 2019. In the last calendar year, the performance was worse when the category on an average was -13.20% down.

Around 29% of small cap schemes also could not meet their respective benchmarks. The category on an average generated -1.50% returns in 2019. The category was the worst hit one in 2018 when it was down 19% on an average.

We have taken out the three worst performers in each category. See the list below for the top laggards of the year:
Scheme Name
1-Yr return (%)
Underperformance score*
Value-oriented schemes


Quantum Long Term Equity Value Fund
-0.9517
-15.3044
Indiabulls Value Fund
-0.9373
-9.5836
HDFC Capital Builder Value Fund
0.1058
-8.5411
ELSS or tax-saving


Quantum Tax Saving Fund
-0.9608
-15.3135
Nippon India Tax Saver (ELSS) Fund
0.4222
-9.7866
Aditya Birla SL Tax Plan
4.8256
-9.5271
Multi cap schemes


Taurus Starshare (Multi Cap) Fund-Reg
3.3135
-5.3328
Nippon India Multi Cap Fund
3.3602
-5.2861
Principal Multi Cap Growth Fund
4.1285
-4.5184
Large cap schemes


JM Large Cap Fund
4.5081
-9.8446
Aditya Birla SL Frontline Equity Fund
7.7882
-4.5084
Franklin India Bluechip Fund
7.0802
-4.0661
Large & Mid cap schemes


UTI Core Equity Fund
1.2307
-4.9483
Franklin India Equity Advantage Fund
2.7929
-2.2158
IDFC Core Equity Fund
4.3658
-1.8132
Mid cap schemes


UTI Mid Cap Fund
-0.3126
-1.8534
Quant Mid Cap Fund
-0.2763
-0.9178
Aditya Birla SL Midcap Fund
-2.9031
-0.5513
Small cap schemes


Quant Small Cap Fund
-22.1420
-14.5878
HSBC Small Cap Equity Fund
-10.2934
-2.8959
Aditya Birla SL Small Cap Fund
-10.0790
-2.6673
*Underperformance score= 1-yr returns of the scheme minus 1-yr return of the benchmark
Source: Ace MF

Though 2019 numbers show some improvement over 2018, the average returns from all the mutual fund categories can still frustrate most mutual fund investors. But investors should keep in mind that they are not investing in equity mutual funds for one calendar year. This article is just an informational article and readers should not take it as any kind of advice or recommendations.

Also Read

Equity mutual fund inflows revive in December

Six consistent equity mutual funds of the decade to bet on

Are you investing enough in equity mutual funds?

Have I invested in the right equity mutual funds?

50% equity mutual funds underperform their benchmark in 2019

Comments
Add Your Comments
Commenting feature is disabled in your country/region.

Other useful Links


Copyright © 2020 Bennett, Coleman & Co. Ltd. All rights reserved. For reprint rights: Times Syndication Service