Smallcaps serve as anchors amid choppy equity seas

Active schemes steady portfolios where benchmarks wobble

- ABHISHEK KUMAR

Most active equity schemes outperformed their benchmarks over the past year, offering some relief to investors battered by a volatile equity market.

Smallcap funds, which hold the largest number of investor accounts, led the gains relative to their benchmarks. As of September 8, 23 of 28 schemes posted higher returns than the Nifty Smallcap 250 TRI (Total Return Index), which fell 7 per cent. The outperformance gap is even wider against the BSE 250 SmallCap TRI, which declined 7.7 per cent.

This marks a rebound after more than two years of underperformance during a strong rally in smallcap stocks.

Ashwin Patni, head of wealth management solutions at Julius Baer India, said this performance trend lines up with expectations. "In 2024, many smallcap index constituents rallied sharply, even when fundamentals didn't justify such gains. In one-directional bull markets, active funds often lag their benchmarks," he explained.