Over 89% of Indian Equity Large Cap funds underperformed their benchmark in the five-year period ending June 2022

S&P Dow Jones Indices releases SPIVA® India Mid-Year 2022 results

India, November 23, 2022: S&P Dow Jones Indices (“S&P DJI”), the world’s leading index provider, today published the S&P Indices Versus Active Funds (SPIVA®) India Scorecard. According to the report, 90.91% of the Indian Equity Large Cap funds underperformed the index in the one-year period ending in June 2022. In the same period, 27.45% of Indian Mid/ Small Cap and 75.61% of Indian ELSS funds underperformed their respective benchmarks.

The beginning of the year was particularly tough for Indian Equity Large Cap managers, with 87.5% of funds in the category underperforming in H1 2022 following SPIVA India Year-End 2021 scorecard for the same period. Further observing the markets, after holding up well in Q1, Indian equities plunged in Q2 2022. Among all the categories included in the SPIVA India Scorecard, Indian Equity Mid-/Small-Cap Funds fared the best by far in the long run, with a slim majority of them managing to beat the S&P BSE 400 MidSmallCap Index over the 10-year period ending in June 2022.

Benedek Voros, Director, Index Investment Strategy, S&P Dow Jones Indices said, “Although the Indian mid-cap benchmark had its worst H1 since 2013, active managers in the category had a great start to the year, with an underperformance rate of just 35.3%, possibly benefiting by exposure to a few larger names in their portfolios.”

The report also notes that the Indian ELSS funds could boast the highest long-term survival rates across all categories in our SPIVA India Scorecard, with 77.8% of them still surviving after 10 years.

Meanwhile, after suffering a 79% underperformance rate as per SPIVA India Year-End 2021, just 22% of Indian Government Bond funds lagged the S&P BSE India Government Bond Index in the first six months of 2022. This put actively managed Indian Government Bond funds on track for their best (i.e. lowest) underperformance rate since the inception of India SPIVA reports in 2013.

As frequently seen on SPIVA Scorecards across geographies and categories, underperformance rates generally rose with the length of the period in which they were measured. Over the 10-year time horizon, more than 60% of funds underperformed in all categories outside of Indian Equity Mid/Small Cap.

Report 1 a: Percentage of Funds Outperformed by the Index (Based on Absolute Return)

Fund Category

Comparison Index

YTD (%)

1-Year (%)

3-Year (%)

5-Year (%)

10-Year (%)

Indian Equity Large Cap

S&P BSE 100

87.50

90.91

83.87

89.06

67.36

Indian ELSS

S&P BSE 200

79.49

75.61

75.61

88.37

63.89

Indian Equity Mid/Small Cap

S&P BSE 400 MidSmallCap Index

35.29

27.45

52.08

51.11

46.88

Indian Composite Bond

S&P BSE India Bond Index

19.15

29.37

56.94

77.70

98.10

Indian Government Bond

S&P BSE India Government Bond Index

22.22

34.62

64.00

75.61

88.46

Source: S&P Dow Jones Indices LLC, Morningstar, and Association of Mutual Funds in India. Data as of June 30, 2022. Returns are shown in INR. Past performance is no guarantee of future results. Table is provided for illustrative purposes.

Report 1b: Percentage of Funds Outperformed by the Index (Based on Risk-Adjusted Return)

Fund Category

Comparison Index

YTD (%)

1-Year (%)

3-Year (%)

5-Year (%)

10-Year (%)

Indian Equity Large Cap

S&P BSE 100

–

90.91

74.19

81.25

65.28

Indian ELSS

S&P BSE 200

–

75.61

73.17

90.70

66.67

Indian Equity Mid/Small Cap

S&P BSE 400 MidSmallCap Index

–

–

41.67

40.00

35.94

Indian Composite Bond

S&P BSE India Bond Index

–

26.57

53.47

64.03

70.48

Indian Government Bond

S&P BSE India Government Bond Index

–

23.08

84.00

92.68

94.23

Source: S&P Dow Jones Indices LLC, Morningstar, and Association of Mutual Funds in India. Data as of June 30, 2022. Returns are shown in INR. Past performance is no guarantee of future results. Table is provided for illustrative purposes. Results shown for all time horizons over which the comparison index total return was positive.

SPIVA India

The SPIVA India Scorecard reports on the performance of actively managed Indian mutual funds compared to their respective benchmark indices over one-, three-, and five-year investment horizons. With this edition of the scorecard, we have introduced style consistency of funds and extended the study over the 10-year period ending December 2018. It is not possible to invest directly in an index, and index returns do not reflect expenses an investor would pay. For more information, please visit www.spglobal.com/spdji