How many mutual funds beat the S&P 500?
S&P Dow Jones Indices' scorecard compares the performance of actively-managed mutual funds to major indices. It found that over the course of one year, 51.08% of actively-managed mutual funds underperformed the S&P 500, and 48.92% of actively-managed funds outperformed the S&P 500.
| Fund | 2023 performance (%) | 5yr performance (%) |
|---|---|---|
| T. Rowe Price US Blue Chip Equity | 49.54 | 81.57 |
| MS INVF US Growth | 49.29 | 62.08 |
| New Capital US Growth | 48.68 | N/A |
| T. Rowe Price US Large Cap Growth Equity Fund | 48.64 | 98.92 |
S&P Dow Jones Indices' scorecard compares the performance of actively-managed mutual funds to major indices. It found that over the course of one year, 51.08% of actively-managed mutual funds underperformed the S&P 500, and 48.92% of actively-managed funds outperformed the S&P 500.
Key Points. Less than 10% of active large-cap fund managers have outperformed the S&P 500 over the last 15 years. The biggest drag on investment returns is unavoidable, but you can minimize it if you're smart. Here's what to look for when choosing a simple investment that can beat the Wall Street pros.
What Are the Results? Generally, when you look at mutual fund performance over the long run, you can see a trend of actively-managed funds underperforming the S&P 500 index. A common statistic is that the S&P 500 outperforms 80% of mutual funds. While this statistic is true in some years, it's not always the case.
| Focused funds | 5-year-return (%) | Benchmark index (%) |
|---|---|---|
| 360 ONE Focused Equity Fund | 22.21 | 17.61 |
| Franklin India Focused Equity Fund | 18.03 | 17.45 |
| HDFC Focused 30 Fund | 18.96 | 17.45 |
| ICICI Prudential Focused Equity Fund | 19.04 | 17.61 |
As we can see in the table above, the highest 10-year performance was delivered by Quant Focused Fund (19.03%) and Nippon India Focused Equity Fund whose performance was far ahead of the benchmark index fund. Other top-performing focused mutual funds delivered annualised returns in the range of 17-20 percent.
Although it is very difficult, the market can be beaten. Every year, some managers boast better numbers than the market indices. A small fraction even manages to do so over a longer period. Over the horizon of the last 20 years, less than 10% of U.S. actively managed funds have beaten the market.
Nearly 70-80 per cent of actively managed equity funds have outperformed their benchmarks over 10 years, while the share of equity funds beating benchmarks over five years and three years has improved to 55-60 per cent and 45-50 per cent.
With equity markets dipping into bear territory in mid-June, inflation at a 40-year high, geopolitical turmoil and continued rate rises by the Federal Reserve, 49% of large-cap domestic equity funds outperformed the S&P 500 in the first half of 2022, according to the SPIVA U.S. Scorecard.
What mutual funds does Dave Ramsey recommend?
I put my personal 401(k) and a lot of my mutual fund investing in four types of mutual funds: growth, growth and income, aggressive growth, and international. I personally spread mine in 25% of those four.
What were the top-performing funds? Top of the list by some margin was the JP Morgan Emerging Europe, Middle East & Africa investment trust, with a one-year return of almost 50%. The Amundi Semiconductor ETF comfortably took second place with a one-year return of 43%, well ahead of the iShares Poland ETF at 35%.
Berkshire has a history of outperforming the S&P 500 during recessions, and performing especially well during bear markets, according to data from Bespoke Investment Group. Since 1980, Berkshire shares have beat the broader market over the course of six recessions by a median of 4.41 percentage points.
The investment objective of an actively managed mutual fund is to outperform market averages — to earn higher returns by having experts strategically pick investments they think will boost overall performance. » Learn more: Understand the different types of mutual funds. S&P Dow Jones Indices.
S&P 500 Index Versus Nasdaq 100 Performance
Nasdaq 100 has outperformed S&P by a wide margin. The average 10-year return of Nasdaq 100 over these 15 years was around 9%, while that of S&P 500 was about 5%.
| Average Mutual Fund Returns | ||
|---|---|---|
| Category | 2021 Return | 10-Year |
| U.S. Mid-Cap Stock | 23.40% | 13.12% |
| U.S. Small-Cap Stock | 24.19% | 12.74% |
| International Large-Cap Stock | 9.72% | 7.85% |
- Bandhan Small Cap Fund. 32.04%
- Union Midcap Fund. 31.47%
- Aditya Birla Sun Life Digital India Fund. 30.99%
- Quant Active Fund. 30.64%
- Aditya Birla Sun Life PSU Equity Fund. 30.63%
- Quant Flexi Cap Fund. 30.47%
- PGIM India Midcap Opportunities Fund. 30.22%
- Tata Digital India Fund. 30.02%
| Ticker | Name | 5-year return (%) |
|---|---|---|
| STSEX | BlackRock Exchange BlackRock | 16.47% |
| USBOX | Pear Tree Quality Ordinary | 16.38% |
| PBFDX | Payson Total Return | 16.30% |
| SSAQX | State Street US Core Equity Fund | 16.20% |
| Fund Name | 3 Years Return | 5 Years Return |
|---|---|---|
| Quant Active Fund (G) | 30.8% | 30.2% |
| Invesco India PSU Equity Fund (G) | 38.2% | 29.3% |
| ICICI Prudential Infrastructure Fund (G) | 39.5% | 28.9% |
| Bank of India Manufacturing & Infra fund (G) | 30.9% | 27.9% |
The top-performing flexi cap mutual funds include Quant Flexi Cap, JM Flexicap and Parag Parikh Flexi Cap Fund, which have given more than 20% annualised returns in the past five years.
Which mutual fund gives highest return in 1 year?
Over the 3 years, returns from funds vary from 27.62 per cent to 50 per cent. Bandhan Small Cap Fund showed consistently strong performance across all time frames, with the highest one-year return of 73.16 per cent and a decent 3-year return of 34.72 per cent.
Here are our recommendations if you are looking for large cap schemes to invest to take care of your long term goals: Axis Bluechip Fund, Canara Robeco Bluechip Equity Fund, Mirae Asset Large Cap Fund, BNP Paribas Large Cap Fund, and Edelweiss Large Cap Fund.
Consistently beating the returns of the S&P 500 index is quite difficult for most investors. Here are some of the key reasons why outperforming the index is challenging: The S&P 500 is composed of 500 of the largest, most established companies in the U.S. These tend to be highly efficient and competitive firms.
Index funds offer lower fees and tax efficiency. Due to their passive nature, they often perform in line with market benchmarks, making them suitable for investors seeking broad market exposure at lower costs. On the other hand, active mutual funds aim to outperform the market by employing active management strategies.
Nearly 57% of active U.S. equity funds survived and beat their average index peer over the 12 months through June 2023.
