The percentage of large-cap active funds that underperformed the S&P BSE 100 over a one-year period rose from 40% in 2019 to 80.65% in 2020. In this column, we evaluate the return betas of active funds to investigate a potential reason that may have led to the funds’ underperformance. Only 40% of active funds in this category underperformed the benchmark in 2019, but over 80% lagged in 2020. Large-cap active funds had an aggregate category beta of 1.02 in 2019, which was higher than the 0.96 recorded in 2020. But for the rest of the nine-month period in 2020, mid/small-cap funds lagged the benchmark index by 10.2% and 7.4% on an asset- and equal-weighted basis, respectively.

Source: Mint May 18, 2021 16:07 UTC