72% of Equity Funds Fail Benchmarks: Is Yours One?

Most equity mutual funds in India fail to beat their benchmark index over the long run. Before your next SIP, check if your fund is a consistent performer or quietly draining your returns.

Here's what happened: Studies show only about 1 in 4 actively managed equity funds in India consistently beat their benchmark index over a 5–10 year period.. Fund performance screeners let investors filter mutual funds by category, benchmark comparison, and risk-adjusted returns — not just raw past returns.. SEBI now mandates that all fund houses disclose risk-o-meter and benchmark-adjusted returns, making it easier for retail investors to compare fund quality..

What you should do: Compare your existing equity fund's 3-year and 5-year returns against its declared benchmark on AMFI's website — if it lags, it's a red flag.. Check your fund's Sharpe Ratio and Sortino Ratio on platforms like MFCentral or Value Research — a higher ratio means better risk-adjusted returns.. Consider switching persistent underperformers to a direct-plan index fund or Nifty 50 ETF, which typically charges just 0.1–0.2% expense ratio versus 1–2% for active funds..

Pro tip: Always compare a fund against its own declared benchmark — not the Sensex. A mid-cap fund beating the Nifty 50 means nothing if it lags the Nifty Midcap 150.