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S&P Dow Jones Indices (“S&P DJI”), the world’s leading index provider, today published the results of its S&P Indices versus Active Funds (SPIVA®) India Scorecard for the first half of 2023.

The SPIVA Scorecard shows the varying performance of active managers in India across different fund categories in the first six months of 2023. Most Indian Equity Large-Cap funds failed to beat their benchmark, with 58% of actively managed funds underperforming the S&P BSE 100.

In the fixed income fund category, while the S&P BSE India Government Bond Index increased 4.7% in the first half of 2023, fewer than one-sixth of active bond fund managers beat the benchmark over the period, with an underperformance rate of 85.2%. However, fewer funds underperformed as time horizons extended, with underperformance rates over 3- and 5-year periods falling to 75.0% and 66.7%.

Benedek Voros, Director, Index Investment Strategy, S&P Dow Jones Indices said, “In the early months of 2023, the Indian stock market saw some notable gains across various market capitalization segments as measured in local currency. For example, the S&P BSE 400 MidSmallCap Index the benchmark for Indian Equity Mid-/Small-Cap funds, not only surpassed the total returns of the S&P BSE 200, but also posted higher returns than the S&P BSE 100 by an impressive margin of more than 5%.”

In addition, while the S&P BSE 400 MidSmallCap Index rose 12.4% in the first half of 2023, 45.3% of active managers underperformed the index over that period. It is worth noting, however, that among all the fund categories included in the SPIVA India Scorecard, Indian Equity Mid-/Small-Cap funds fared the best over a 5-year horizon, with only 38.1% of funds underperforming the S&P BSE 400 MidSmallCap Index.

Separately in other categories, the S&P BSE India Bond Index rose 4.6% in the first half of 2023 but the underperformance rates of Indian Composite Bond fund managers were the highest across all categories in the SPIVA India Scorecard, at 95.7%.

Indian Composite Bond funds also had the lowest survival rates across all categories over the 1-, 3-, and 5-year horizon, with a fifth of the category’s funds closed or merged over the past 5 years. As frequently seen on SPIVA Scorecards across geographies and categories, underperformance rates generally rose with the length of the period in which they were measured.

SPIVA India

The SPIVA India Scorecard reports on the performance of actively managed Indian mutual funds compared to their respective benchmark indices over one-, three-, and five-year investment horizons. With this edition of the scorecard, we have introduced style consistency of funds and extended the study over the 10-year period ending December 2018. It is not possible to invest directly in an index, and index returns do not reflect expenses an investor would pay. For more information, please visit www.spglobal.com/spdji

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