If your fund has beaten tier-II benchmark, just don't exit: Analysts

Stick to it, even if it lags its tier-I benchmark and category average

Until now, investors have compared their mutual fund scheme’s performance against a single benchmark. The more diligent among them would have also compared their fund’s performance against the category average. In future, however, many funds could sport two benchmarks — a tier-I (primary) and a tier-II (secondary) benchmark.

Through a circular dated October 27, 2021, the Securities and Exchange Board of India (Sebi) had mandated a two-tier benchmarking structure for certain categories of schemes. The Association of Mutual Funds in India (Amfi) had to publish a list of tier-I benchmarks, which were to be adopted by funds from January 1,