80% Equity Mutual Funds Outperform Benchmarks in October 2024

The mutual fund industry in India showed impressive performance in October 2024, with 80% of equity mutual funds outperforming their respective benchmarks. This significantly improved compared to September 2024, when only 48% of funds surpassed their benchmarks. The study, which analysed 240 open-ended diversified equity funds, highlights the strength of equity funds across various categories despite a slight dip in total assets under management (AUM).

Strong Performance Across Categories

Among the best-performing categories were Value, Contra, and Dividend Yield Funds, with 96% of the schemes outperforming their benchmarks in October. These funds have demonstrated robust stock-picking strategies and market resilience.

Other categories also fared well:

• Flexi Cap Funds: 86% of schemes outperformed the NIFTY 500 TRI.
• Large & Mid Cap Funds: 85% beat the NIFTY LargeMidcap 250 TRI index.
• Large Cap Funds: 84% exceeded the S&P BSE 100 TRI benchmark.
• Mid Cap Funds: 81% outperformed the Nifty Midcap 150 TRI.
• Equity Linked Savings Schemes (ELSS): 81% of schemes surpassed the NIFTY 500 TRI.
• Multi Cap Funds: 77% outperformed the Nifty500 Multicap 50:25:25 TRI.

Small Cap Funds Lag Behind

While most categories showed strong performance, Small Cap Funds were the least successful, with only 60% of schemes outperforming the Nifty Smallcap 250 TRI. This indicates challenges for small-cap investments in the current market scenario.

Decline in Total AUM

Despite the stellar performance of most funds, the total AUM for equity mutual funds saw a slight decline of 4.03%, dropping from ₹26.43 lakh crore in September 2024 to ₹25.37 lakh crore in October. This dip may reflect market volatility or profit-booking by investors, yet the overall positive returns by most funds highlight the resilience of equity mutual funds.

Key Trends and Insights

The exceptional performance of categories like Value, Contra, and Dividend Yield Funds suggests that strategic stock selection and diverse market approaches played a pivotal role. Flexi Cap and Large & Mid Cap Funds also benefited from broad exposure to a mix of sectors, helping them navigate market fluctuations.

Investors looking for consistency in performance may find opportunities in these top-performing categories. On the other hand, the challenges faced by Small Cap Funds point to the importance of cautious investing in this segment.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.