Reasons For Non-Performance

Many mutual fund investors in these turbulent times ask, “The Sensex is doing very well then why are my funds down in the dumps?” They do not realise that the invested funds do not mirror the Sensex, as they are in a different category to the Sensex.   Mutual Funds Track Different Benchmarks Sensex 30 or Nifty 50 comprises large cap companies, in which funds of various caps are available. Not necessarily all have Sensex or Nifty as their benchmark indices. Some have Nifty 50 mid cap, some track Nifty Bank and some may have Nifty small-cap as their benchmark index. When we look at the market commonly we only see the bellwether indices, Sensex 30 or Nifty 50. They are both large cap indices and hence compare against the wrong benchmark if say we are comparing mid-cap or small-cap mutual funds to the Sensex or Nifty. In case of multi-cap funds, they may have the Nifty 500...