80% of equity MFs outperform respective benchmarks in October 2024: Study

Value, Contra & Dividend Yield Funds was the best performing category where 96% of the schemes outperformed the benchmark

Eighty per cent  of equity mutual funds outperformed their respective benchmarks in October 2024, said a study by PL Wealth Management, a part of Prabhudas Liladhar.  The report, based on analysis of 240 open-ended diversified equity funds, reveals strong performance across various categories, with a few exceptions.  In September 2024, only 48% of the schemes were able to beat their benchmarks. 

Out of the 240 open-ended equity diversified funds, about 58% of the funds were able to outperform their respective benchmarks over the past one year, ended October 31 2024. Previous year, 55% of the schemes were able to beat their benchmarks.

 

"Investors are advised to stick to their SIP investments and keep a long-term focus. SIPs over the past 3-years have yielded a return in excess of 15% p.a. on an average for the top quartile equity funds," said Pankaj Shrestha Head - Investment Services at PL Wealth.

 

The total assets under management (AUM) of equity mutual funds saw a slight decline of 4.03%, dropping to Rs 25,36,803 crore in October 2024, compared to Rs 26,43,291 crore in September 2024. Despite the dip in total assets, the majority of funds showed positive returns, with 192 out of 240 funds (80%) performing better than their benchmarks during the month. 

 

Among the best performers were Value, Contra, and Dividend Yield Funds, where an impressive 96% of schemes outperformed their benchmarks. These funds were followed by Flexi Cap Funds and Large & Mid Cap Funds, with 86% and 85% of the schemes respectively surpassing their benchmarks in October.

 

Here’s a breakdown of the performance across different categories:

• Large Cap Funds: 84% of funds outperformed the S&P BSE 100 TRI benchmark.
• Large & Mid Cap Funds: 85% of schemes beat the NIFTY LargeMidcap 250 TRI index.
• Multi Cap Funds: 77% of funds surpassed the Nifty500 Multicap 50:25:25 TRI.
• Flexi Cap Funds: 86% outperformed the NIFTY 500 TRI.
• Mid Cap Funds: 81% of funds exceeded the Nifty Midcap 150 TRI.
• Small Cap Funds: Only 60% outperformed the Nifty Smallcap 250 TRI.
• Focused Funds: 65% of schemes beat the NIFTY 500 TRI.
• Equity Linked Savings Schemes (ELSS): 81% outperformed the NIFTY 500 TRI.

 

 Small Cap Funds were the least successful category, with just 60% of the funds outperforming their benchmark. 

 

The positive trend, especially in categories like Value, Contra, and Dividend Yield Funds, indicates strong stock picking and market strategies that helped these funds perform well. Flexi Cap and Large & Mid Cap Funds also showed resilience in the market, benefiting from a diverse range of stocks across sectors.