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Why have mutual funds not recovered as much as the Sensex?

Funds are not the index but portfolios of different stocks and this leads to the difference between fund returns and index returns, says Dhirendra Kumar

The Sensex fell drastically by approximately 40 per cent in March but has recovered by about 60 per cent since then. However, I see many funds have not recovered that much. Why is that so?
- Manoj Kumar Agrawal

There are outliers on both sides. If you recall, some funds fell less than the Sensex. So, there are funds that have recovered far more smartly than the Sensex, while there are funds that have recovered less.
In fact, it is quite surprising the way value funds came back in the last two-three months. Likewise, many small-cap funds have actually recovered far more smartly than the market. So, it depends on the fund. And remember, funds are not the index but portfolios of different stocks and this leads to the difference between fund returns and index returns.

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