Examining outperformance of all equity funds across various categories over three years

Over the past five years, only a few active equity funds in categories like large cap, flexi-cap, mid-cap, focused, and ELSS have managed to outperform their benchmarks. However, in the dividend yield funds category, every scheme has surpassed its benchmark. Additionally, more than half of the schemes in sectoral and thematic funds, small-cap funds, and value funds have outperformed their respective benchmarks.

Here's an overview of the 3-year performance of active equity funds as of July 15, 2024.

Large-cap funds

In the large-cap category, 6 out of 28 large-cap funds have outperformed their benchmark NIFTY 100 TRI in 3 years. Nippon India Large Cap Fund tops the list and has beaten its benchmark with an alpha of 4.83%. JM Large Cap Fund and ICICI Prudential BlueChip Large Cap Fund are the next two funds in terms of performance. The category average stands at 17.65%.

Large and mid-cap funds

In the large and midcap category, 23 out of 27 funds have beaten their benchmark BSE 250 Large-Mid-Cap TRI. Leading the pack are Quant Large and Mid Cap Fund with an alpha of 11.11% and ICICI Pru Large & MidCap Fund with an alpha of 8.2%. Bandhan Core Equity has also outperformed its benchmarks with an alpha of 7.59%, respectively. The category average stands at 21.72%.

Multi-cap funds

Of the total 9 multi-cap funds, 5 funds managed to beat their benchmark NIFTY500 MULTICAP 50:25:25 TRI and generate alpha. Nippon India Multi Cap Fund generated an alpha of 8.72%. The other two funds are Quant Active Fund and Mahindra Manulife Multi Cap Fund. The category average stands at 22.85%.

Mid-cap funds

Out of the 24 mid-cap funds, 4 funds have outperformed their benchmark NIFTY MIDCAP 150 TRI. Leading the way is Motilal Oswal Midcap Fund with an alpha of 10.85%, followed by Quant MidCap Fund at 4.65% and HDFC Mid-Cap Opportunities at 1.77% alpha. The category average stands at 24.95%.

Small-cap funds

50% of the total small-cap funds have generated returns over their benchmark NIFTY SMALLCAP 250 TRI. Nippon India Small Cap Fund, Quant Small Cap Fund and Franklin India Smaller Companies Fund are the top three funds in the category with the highest outperformance range of 5.84%, 4.5% and 3.7%, respectively. The category average stands at 25.43%.

Value funds

About 88% or 14 out of 16 funds have beaten their benchmark BSE 500. JM Value Fund, HSBC Value Fund and Templeton India Value Fund are the top three funds in terms of performance. They have generated an alpha of 12.53%, 8.86% and 8.49%, respectively. The category average stands at 23.35%.

ELSS funds

58% of ELSS funds have beaten their benchmark BSE 500 in the 3 years. SBI Long Term Equity (9.08%), Quant ELSS Tax Saver Fund (7.85%) and HDFC ELSS Tax Saver Fund (7.78%) are the top three ELSS in terms of performance. The category average stands at 19.87%.

Contra funds

All the 3 three funds in the contra fund category have beaten their benchmark BSE 500. Their outperformance range is SBI Contra Fund (10.42%), Kotak India EQ Contra Fund (25.06%) and Invesco India Contra Fund (21.81%). The category average stands at 25.38%.

Dividend yield fund

All funds in this category too outperformed their benchmark. The highest outperformer of the category is ICICI Prudential Dividend Yield Equity Fund with an outperformance of 9.77%. The category average stands at 24.58%.

Focused funds

In the focused fund category, 9 out of 23 focused funds have generated alpha in 3 years. HDFC Focused 30 Fund (8.34%), Mahindra Manulife Focused Fund (4.91%), and ICICI Prudential Focused Equity Fund (3.87%) are the top focused funds in this category. The category average stands at 18.96%.

Flexi-cap funds

Of the 24 funds, 11 funds have outperformed their benchmarks. The leading fund is Quant Flexi Cap Fund with a return of 12.93%. Following Flexi Cap Fund are JM Flexi Cap Fund and HDFC Flexi Cap Fund, which have outperformed their benchmark by 13.54% and 8.25%, respectively. The category average stands at 19.4%.

Conclusion

Active equity funds, particularly in dividend yield, sectoral, and small-cap categories, have showcased remarkable outperformance. This highlights their potential for generating substantial alpha against their respective benchmarks.