August 13, 2018

Most mutual funds schemes underperform as 70% of stocks with market cap of Rs 1,000 crore are trading in red

Of a sample of 30 large-cap equity schemes only ten have managed to outperform the Value Research average large-cap category over a two-year period. Of the nearly 800 stocks that command a market capitalisation of over Rs 1,000 crore, more than a third have lost more than 20% since January 2018.

The under-performance seems to have taken a toll on investor sentiment because in July, the inflows into equity schemes at `9,452 crore, were at their lowest in four months.

Read more at https://www.financialexpress.com/market/most-mutual-funds-schemes-underperform-as-70-of-stocks-with-market-cap-of-rs-1000-crore-are-trading-in-red/1278765

My notes: there is additional loss of 2 to 2.5% pa on account of management fees. Since it will become more difficult for fund managers to outperform the index, it makes sense to invest in niftybees.

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