Low exposure to Adani Group stocks tilts active vs passive debate

More actively managed schemes manage to beat benchmarks in Q4, thanks to low holding in Adani Group stocks

Abhishek KumarSamie Modak Mumbai
adani group

Photo: Bloomberg

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Actively managed mutual fund (MF) schemes have been at the receiving end over the past few years for their inability to beat their benchmarks. However, the slump in shares of Adani Group companies — two of which are part of the benchmark National Stock Exchange Nifty50 index — have helped active equity schemes improve their performance vis-à-vis exchange-traded funds (ETFs) or index funds.
Nearly 83 per cent of large-cap schemes had underperformed their benchmarks in calendar 2022 (CY22). However, the performance of actively managed schemes improved considerably during the January-March quarter (fourth quarter, or Q4) of 2022-23 (FY23) when shares of 10 Adani Group stocks saw wealth erosion of over Rs 12 trillion, following a scathing report by US-based short-seller Hindenburg Research.
As a result, the number of active schemes underperforming their benchmarks declined to 69 per cent for the 12 months ended March 2023.

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First Published: Apr 24 2023 | 9:21 PM IST

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