New Delhi, July 23 -- Actively managed equity funds in India are finding it harder to beat their benchmark. For five-year return periods ending in 2025, large-cap schemes trailed the Nifty 100 Total Return Index (TRI) 41% of the time, according to a rolling return analysis based on data from Ace MF. Mid-cap funds lagged the Nifty Midcap 150 TRI in 69% of such periods.

Small-cap funds held up slightly better. In five-year periods ending in 2025, they underperformed the Nifty Smallcap 250 TRI 40.6% of the time. Over the years, small-cap schemes have shown more instances of outperformance versus their benchmark than large- and mid-cap funds have. (see: gfx)

Yet passive funds-index funds and exchange-traded funds (ETFs) that simply track a ...