75% of Active Large Cap Funds outperformed the Index for a year period. Hence, is it time to move to active large-cap funds from passive large-cap funds?
In the financial world, the debate between active and passive investing is ongoing. Supporters of active funds celebrate when they outperform the benchmark, while the opposite is true when they underperform. Despite this, many large-cap funds have been facing challenges in beating the benchmark, especially after SEBI Recategorization. Surprisingly, when looking at the returns from last year, approximately 75% of active large-cap funds managed to outperform the index.
Let’s take a moment to delve into the meaning of large-cap as defined by SEBI before we dive into the remarkable performance of active large-cap funds. According to SEBI, large-cap funds are required to invest a minimum of 80% of their total assets in equity and equity-related instruments of large cap companies. As for the remaining 20%, the fund manager has the…