In 2023, a significant portion of actively managed mutual funds, especially in mid-cap and small-cap categories, underperformed their benchmarks, as per the SPIVA Year-End 2023 report. Approximately 74% of actively managed mid and small-cap funds failed to outperform their benchmarks. Similarly, over half of Indian equity large-cap funds also underperformed, with around 52% failing to beat the S&P BSE 100. Notably, the underperformance rates were notably high over three- and five-year periods for Indian equity large-cap funds. Investors should weigh the historical performance and consider factors like fees, risk tolerance, and investment goals when deciding between actively managed and index funds.
Choosing Between Actively Managed and Index Funds: A Decision Guide
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