How Funds Outperform Markets

By and large, equity mutual funds, outperform the stock markets. Surprisingly, this is a controversial statement. That’s because some people firmly believe, based on imported studies that mutual funds don’t actually do so. However, in India, this has always been true. On the face of it, there can be two possible reasons for this. Either Indian fund managers are very good, or the Indian markets are very easy to beat. The truth, as always, is probably a mix of the two. First, the numbers. Value Research has just done a study of the historical outperformance of Indian equity funds, compared to the stock markets. By ‘stock markets’, I mean the large cap indices like the Nifty and the Sensex. Of course, each fund has its own index and technically,

This article was originally published on September 21, 2011.