Let us look at the data. There were around 52 passively-managed schemes in the large cap category. However, only four passively-managed large cap schemes managed to outperform their respective benchmarks in 2023. Most schemes – 48 schemes – underperformed their benchmarks. In comparison, there were 30 schemes in the actively-managed large cap mutual fund category. Around 24 actively-managed large cap schemes managed to outperform their respective benchmarks in 2023. Only six schemes underperformed their benchmarks.
If you want to see the performance of active large cap funds, see story: Large cap funds offer 11.45% average return in 2023; Axis Bluechip Fund give 6.87%
Simply put, the trend so far in this year is challenging for passively-managed large cap schemes, compared to the actively-managed large cap schemes. Out of 52 passively-managed large cap schemes, 40 schemes have given single-digit returns, 12 schemes gave double-digit returns in 2023 so far. The passively-managed or index-based large cap schemes have offered an average return of 8.44% in 2023.
Note, they’re are a large number of passive large cap schemes. However, we considered only schemes that invest in top 100 stocks. That is why we considered the passive 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. We considered the regular and growth options. These benchmarks offered around 6.15-14.40% returns in 2023.
Top five schemes by AUM or assets
UTI Nifty 50 Index Fund, the largest passively-managed large cap scheme that manages Rs 12,092.49 crore, offered 8.05% in 2023, failing to beat its benchmark (NIFTY 50 – TRI) that offered 8.30% in the same period. Other large schemes like HDFC Index Fund-NIFTY 50 Plan, HDFC Index Fund-S&P BSE Sensex, ICICI Prudential Nifty 50 Index Fund, and SBI Nifty Index Fund failed to beat their respective benchmarks.
Motilal Oswal S&P BSE Enhanced Value Index Fund was the topper in the category. The scheme gave 26.86%, against 8.30% offered by its benchmark (NIFTY 50 – TRI). Nippon India Nifty 50 Value 20 Index Fund gave 13.59%, followed by Motilal Oswal S&P BSE Quality Index Fund which gave 13.05%. Six schemes offered around 12%. Bandhan Nifty100 Low Volatility 30 Index Fund gave 11.99% in 2023. Sundaram Nifty 100 Equal Weight Fund and HDFC NIFTY 100 Equal Weight Index Fund gave 10.51% and 10.21% respectively. LIC MF Nifty Next 50 Index Fund and Aditya Birla Sun Life Nifty Next 50 Index Fund gave the lowest return of around 5.20%.
Note, the above exercise is not a recommendation. The main purpose of the exercise was to see how passively-managed large cap schemes performed in 2023 so far.
One should not make investment or redemption decisions based on this exercise. One should always consider risk appetite, investment horizon, and goal before making investment decisions. Past performance does not guarantee future performance.
