S&P Dow Jones Indices has been the de facto scorekeeper of the ongoing active versus passive debate since the first publication of the S&P Indices Versus Active Funds (SPIVA) U.S. Scorecard in 2002. Over the years, we have built on our experience publishing the report by expanding scorecard coverage into Australia, Canada, Europe, India, Japan, Latin America, and South Africa.
The SPIVA India Scorecard compares the performance of actively managed Indian mutual funds with their respective benchmark indices over 1-, 3-, 5-, and 10-year investment horizons. In this scorecard, we studied the performance of three categories of actively managed equity funds and two categories of actively managed bond funds over the 1-, 3-, 5-, and 10-year periods ending in June 2021.
Despite a strong run up in Indian equities in the first half of 2021, the majority of active funds in the large-cap and mid‑/small-cap fund categories lagged their respective benchmarks whereas active funds in the ELSS fund category fared better, in which only 36.59% of active funds underperformed the S&P BSE 200 (see Exhibit 1).
The mid-/small-cap fund category was the best performing among equity funds covered in this scorecard, with the S&P BSE 400 MidSmallCap Index returning 90.56% over the one-year period ending in June 2021. Investors in this category may have witnessed a wide spread in fund returns (the difference in the first and third quartile funds was 27.87%), posing investors with fund selection risks and challenges.
