67% of equity mutual funds outperform benchmarks in August

Around 67% of equity mutual funds outperformed their respective benchmarks in August. There were 283 diversified equity funds open and 190 outperformed during the month. In July, 39% of funds outperformed their benchmarks.

Assets under management (AUM) of equity mutual funds rose 2.04% sequentially to Rs 25.64 lakh crore in August from Rs 25.12 lakh crore in July (excluding sectoral/thematic funds), according to a study by PL Wealth Management.

Source: Ace MF

Large-cap and mid-cap funds were the best performing category with 79% of the schemes outperforming the benchmark. This was followed by focused fund schemes which outperformed their respective benchmarks by 75%. There were 28 focused schemes in the said period and 21 outperformed their benchmarks. During this period, multi-cap, mid-cap and flexible-cap funds were the three categories which outperformed their respective benchmarks by 69% each. Out of the 26 multi-cap funds, 18 outperformed their benchmarks.

Large-cap funds scored 55% higher. Of 31 large-cap funds, 18 outperformed. Of 28 small-cap funds, 15 outperformed their respective benchmarks.

The study highlighted that in the last one year, 88% of value, contra and dividend yield funds outperformed their benchmarks. Around 68% of large-cap funds managed to outperform their respective benchmarks in the last one-year period. Small-cap funds scored the lowest outperformance score as only 18% of schemes outperformed their respective benchmarks.

Of the 283 diversified open-end equity funds, approximately 48% of the funds managed to outperform their respective benchmarks over the past year, which ended August 31.

2024.

The study mentions that investors are advised to stick to their SIP investments and maintain a long-term focus. Over the last 3 years, SIPs have generated returns of over 15% per annum on average for top quartile equity funds.