92% passive large cap funds fail to beat benchmarks in 2023

Around 92% passive or index-based large cap mutual funds failed to beat their respective benchmarks in 2023, an analysis of performance of large cap index funds showed. There were around 52 passive large cap schemes and 48 schemes failed to beat their respective benchmarks. In other words, only four large cap index funds managed to beat their respective benchmarks in the last year.

We considered the passive large cap schemes benchmarked against NIFTY 50 – TRI, Nifty50 Value 20 – TRI, NIFTY50 Equal Weight – TRI, Nifty100 Low Volatility 30 – TRI, Nifty100 Equal Weight – TRI, S&P BSE SENSEX – TRI, NIFTY 100 – TRI, and NIFTY NEXT 50 – TRI. These benchmarks gave 21.30%, 29.79%, 31.04%, 31.87%, 30.68%, 20.33%, 21.24%, and 27.24% respectively. We considered the regular and growth options.

Passive large cap schemes: Outperformers in 2023

Scheme	Scheme returns	Benchmark returns
Motilal Oswal S&P BSE Enhanced Value Index Fund	59.31%	21.30%
Motilal Oswal S&P BSE Quality Index Fund	32.44%	21.30%
UTI S&P BSE Low Volatility Index Fund	29.36%	21.30%
Motilal Oswal S&P BSE Low Volatility Index Fund	28.88%	21.30%

Source: ACE MF, Trailing returns as on January 15, 2024

Passive large cap schemes: Underperformers in 2023

Scheme	Scheme returns	Benchmark returns
DSP Nifty 50 Equal Weight Index Fund	29.76%	31.04%
Bandhan Nifty100 Low Volatility 30 Index Fund	29.64%	31.87%
HDFC NIFTY50 Equal Weight Index Fund	29.62%	31.04%
Aditya Birla Sun Life Nifty 50 Equal Weight Index Fund	29.50%	31.04%
ICICI Prudential Nifty50 Equal Weight Index Fund	29.37%	31.04%
HDFC NIFTY 100 Equal Weight Index Fund	29.11%	30.68%
Sundaram Nifty 100 Equal Weight Fund	29.01%	30.68%
Nippon India Nifty 50 Value 20 Index Fund	28.53%	29.79%
DSP NIFTY Next 50 Index Fund	26.68%	27.24%
ICICI Prudential Nifty Next 50 Index Fund	26.33%	27.24%
SBI Nifty Next 50 Index Fund	26.23%	27.24%
UTI Nifty Next 50 Index Fund	26.21%	27.24%
HSBC Nifty Next 50 Index Fund	26.13%	27.24%
Motilal Oswal Nifty Next 50 Index Fund	26.11%	27.24%
HDFC NIFTY Next 50 Index Fund	26.09%	27.24%
Kotak Nifty Next 50 Index Fund	26.07%	27.24%
Navi Nifty Next 50 Index Fund	26.03%	27.24%
Axis Nifty Next 50 Index Fund	25.86%	27.24%
Aditya Birla Sun Life Nifty Next 50 Index Fund	25.78%	27.24%
Edelweiss Nifty Next 50 Index Fund	25.78%	27.24%
LIC MF Nifty Next 50 Index Fund	25.73%	27.24%
UTI Nifty 50 Index Fund	20.89%	21.30%
Navi Nifty 50 Index Fund	20.83%	21.30%
DSP NIFTY 50 Index Fund	20.79%	21.30%
HDFC Index Fund-NIFTY 50 Plan	20.78%	21.30%
HSBC Nifty 50 Index Fund	20.78%	21.30%
Axis Nifty 50 Index Fund	20.74%	21.30%
ICICI Prudential Nifty 50 Index Fund	20.73%	21.30%
SBI Nifty Index Fund	20.65%	21.30%
Motilal Oswal Nifty 50 Index Fund	20.61%	21.30%
Aditya Birla Sun Life Nifty 50 Index Fund	20.59%	21.30%
Nippon India Index Fund-Nifty 50 Plan	20.53%	21.30%
Bandhan Nifty 50 Index Fund	20.52%	21.30%
Kotak Nifty 50 Index Fund	20.52%	21.30%
Tata NIFTY 50 Index Fund	20.51%	21.30%
Bandhan Nifty 100 Index Fund	20.49%	21.24%
Edelweiss Nifty 50 Index Fund	20.41%	21.30%
Franklin India NSE Nifty 50 Index Fund	20.25%	21.30%
HDFC NIFTY 100 Index Fund	20.08%	21.24%
Axis Nifty 100 Index Fund	19.96%	21.24%
UTI S&P BSE Sensex Index Fund	19.83%	20.33%
LIC MF Nifty 50 Index Fund	19.83%	21.30%
HDFC Index Fund-S&P BSE Sensex	19.81%	20.33%
ICICI Prudential S&P BSE Sensex Index Fund	19.77%	20.33%
Tata S&P BSE Sensex Index Fund	19.50%	20.33%
Nippon India Index Fund-S&P BSE Sensex Plan	19.45%	20.33%
Taurus Nifty 50 Index Fund	19.40%	21.30%
LIC MF S&P BSE Sensex Index Fund	19.03%	20.33%

Source: ACE MF, Trailing returns as on January 15, 2024Motilal Oswal S&P BSE Enhanced Value Index Fund, the topper in the category, offered 59.31% in 2023. Motilal Oswal S&P BSE Quality Index Fund gave 32.44% in 2023. UTI Nifty 50 Index Fund, the largest passive large cap scheme based on assets managed, offered 20.89%. The scheme manages assets worth Rs 15,002.04 crore. HDFC Index Fund-NIFTY 50 Plan, second largest scheme based on assets under management, gave 20.78%. The scheme manages assets of Rs 11,887.46 crore. Both these schemes failed to beat their respective benchmarks in 2023. Taurus Nifty 50 Index Fund, the smallest passive large cap scheme, offered 19.40% against 21.30% offered by its benchmark (NIFTY 50 – TRI). The scheme failed to beat its benchmark in 2023. The scheme manages assets of Rs 3.23 crore.

Outperformers in the category
Motilal Oswal S&P BSE Enhanced Value Index Fund gave 59.31%, compared to 21.30% offered by its benchmark (NIFTY 50 – TRI) in 2023. Motilal Oswal S&P BSE Low Volatility Index Fund offered 28.88% against 21.30% by its benchmark.

Motilal Oswal S&P BSE Quality Index Fund and UTI S&P BSE Low Volatility Index Fund gave 32.44% and 29.36% respectively against 21.30% by the benchmark (Nifty 50-TRI).

Around 25 schemes have offered more than 25% in 2023. Around 18 schemes have offered approximately 20%.

Note, the above exercise is not a recommendation. The purpose of the exercise was to see how passively-managed large cap schemes performed in 2023.

One should not make investment or redemption decisions based on this exercise.

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