81% Of ELSS Funds Fail To Beat Benchmark

81% Of ELSS Funds Fail To Beat Benchmark

ELSS Funds Returns Report

ELSS (Equity-Linked Savings Schemes) funds have a lock-in period of 3 years from the date of investment. These funds also known as diversified equity mutual funds. The returns of ELSS reflect from the equity market. These are the close-ended equity schemes. In July 2018- June 2019, nearly 81 % of ELSS funds fail to beat the benchmark. The ELSS schemes reports reveal by S&P Indices Versus Active India Scorecard.

Further, it added that 76.67 of large-cap equity schemes, 76.92 percent of Indian government bond funds and 95 percent of Indian composite bond funds also failed to their benchmarks.

According to the reports, the majority of actively managed large-cap equity funds in India failed to S&P BSE 100. Over the last 10 years, the large-cap funds witnessed a low style consistency of 16.67 percent and a low survivorship rate of 68.33%, said by the officials of SPIVA.

In case of a longer period, the equity mutual funds perform well to its benchmark. 39 percent of large-cap funds outperform to its benchmark in the past 10 years. Meanwhile, 54 percent of tax-savings funds outperformed to its indices. Moreover, 51 percent of Mid-cap and Small-cap funds perform will to their indices. 

Percentage of Funds Outperformed by the Index

 Fund Category  Comparison Index  1-Year (%)  3-Year (%)  5-Year (%)  10-Year (%)
 Indian Equity Large-Cap  S&P BSE 100  76.67  82.93  65.71  61.34
 Indian ELSS  S&P BSE 200  80.95  83.33  51.35  45.71
 Indian Equity Mid-Small  S&P BSE 400 MID&SmallCap Index  18.92  47.83  26.98  48.84
 Indian Government Bond  S&P BSE India Government Bond Index  76.92  73.17  84.62  87.72
 Indian Composite Bond  S&P BSE India Bond Index  98.57  94.20  97.24  96.10

Given returns are shown as of June 28, 2019, by SPIVA.

The actively managed mid and small-cap equity funds returns stood at 3.94 percent over the past 10 years. These returns spread between the first and third quartile breakpoints of the fund performance. While the actively managed large-cap equity funds turn spread over 2.98 percent over the 10 years. 

Besides, the ELSS funds return spread over 3.2 percent between the first and third quartile breakpoint of fund performance over the 10 years.

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  • […] last month, Bombay Stock Exchange benchmark Sensex raised 3.6 percent. At the same time, Equity and ELSS( equity-linked savings schemes) raised by 2 lakhs to 6.18 percent. Moreover, debt oriented schemes and liquid funds folio raised by […]

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