Equity-linked saving schemes outperform benchmark indices

New Delhi: Providing better returns to investors, majority of equity-linked saving schemes as well as mid- and small-cap funds outperformed their respective benchmark stock indices over a five-year period ended December 2015, according to a report.

The S&P Indices Versus Active Funds (SPIVA) scorecard, which tracks performance of actively managed mutual funds against their benchmarks, showed that majority of large-cap equity funds lagged BSE 100 Index over the same period.

"RBI's accommodative stance coupled with the interplay of global and domestic macroeconomic factors led to a mixed sentiment in the capital market," Asia Index Global Research and Design Associate Director Utkarsh Agrawal said.

"Debt funds generated fewer equal and asset-weighted returns than their respective benchmark indices, across all time horizons," he added.

As per the report, majority of equity-linked Savings Scheme (ELSS) and mid- and small-cap funds outperformed the S&P BSE 200 and S&P BSE mid-cap, respectively.

The report said that 21.62 percent of ELSS funds have outperformed S&P BSE 200 for one-year, 2.86 percent for three years and 11.43 percent for five years.

Besides, ELSS funds have delivered a return of 3.27 percent for one year, 18.10 percent for three years and 10.53 percent for five years.

In comparison, S&P BSE 200 gave a return of 0.18 percent for one year period, 13.32 percent for three years and 7.49 percent for five-year period.

The report said that 58.14 percent of mid-cap and small-cap equity funds have outperformed S&P BSE Mid Cap over a one-year period, 17.78 percent for three and 37.93 percent for five year periods.

Mid-cap and small-cap equity funds, offered a return of 8.61 percent, 25.44 percent and 15.08 percent for one, three and five year periods, respectively.

S&P BSE Mid-Cap offered a return of 8.72 percent for one year period, 17.86 percent for three years and 8.98 percent for five-year period.

"Over one, three, and five-year periods ended December 2015, 36 percent, 47 percent and 57 percent of large-cap equity funds in India underperformed the S&P BSE 100, respectively," the report noted.

Besides, majority of debt funds have underperformed their respective indices over five-year period ended December 2015.

In 2015, net investment by domestic mutual funds in the equity market stood at over Rs 72,000 crore, while foreign investors pumped in Rs 17,800 crore into equities.