Over the two years ended August 10, 2026, the Nifty 50 delivered an annualised price return of just 0.4 per cent and 1.7 per cent on a total-return basis, according to a bl.portfolio analysis of 449 actively-managed equity mutual fund schemes. Yet individual fund returns ranged from a 10 per cent loss to a 20 per cent gain, exposing how sharply investor outcomes diverged beneath the index's flat headline. The analysis found 232 schemes — 52 per cent — beat their respective benchmarks over the period.
The two years were marked by sharp corrections, rapid shifts in market leadership and wide divergences across segments, bl.portfolio reported, as sector leadership changed hands repeatedly while risk appetite ebbed and flowed. Mid- and small-caps outpaced large-caps: the Nifty Midcap 150 TRI delivered annualised returns of 6 per cent and the Nifty Smallcap 250 TRI 3.5 per cent, versus the Nifty 50 TRI's 1.7 per cent.
The two-year scoreboard
Outperformance rates varied sharply by category. Multi-cap funds led, with 73 per cent of schemes beating their benchmarks, followed by flexi-cap at 67 per cent and small-cap at 64 per cent. Focused funds recorded 61 per cent, while large-cap funds managed 45 per cent. Value and ELSS funds trailed at 38 per cent and 36 per cent, respectively.
A bl.portfolio analysis of 449 actively-managed equity mutual fund schemes shows just how divided the field was: 232 funds, or 52 per cent, beat their respective benchmarks during the period.
| Index (two years ended August 10, 2026) | Annualised return |
|---|---|
| Nifty 50 (price return) | 0.4% |
| Nifty 50 TRI (total return) | 1.7% |
| Nifty Midcap 150 TRI | 6.0% |
| Nifty Smallcap 250 TRI | 3.5% |
| Category | Share of schemes that beat benchmark |
|---|---|
| Multi-cap | 73% |
| Flexi-cap | 67% |
| Small-cap | 64% |
| Focused | 61% |
| Large-cap | 45% |
| Value | 38% |
| ELSS | 36% |
Size and alpha
Fund size correlated with benchmark-relative success. Among schemes with more than ₹50,000 crore in assets, 10 of 13 — 77 per cent — beat their respective benchmarks, according to the analysis. Outperformers included Parag Parikh Flexi Cap, HDFC Flexi Cap, HDFC Mid Cap, ICICI Prudential Large Cap and Kotak Midcap. Laggards in this group included Nippon India Small Cap, ICICI Prudential Value and Nippon India Multi Cap.
Among schemes with less than ₹10,000 crore in assets, only 49 per cent outperformed their benchmarks. Yet several smaller funds delivered striking alpha: Motilal Oswal Small Cap returned 15 per cent against 3.5 per cent for its benchmark, while Motilal Oswal Multi Cap and Union Small Cap also outperformed, according to bl.portfolio. The analysis covers a range of small-cap and flexi-cap schemes including Motilal Oswal Small Cap, Bank of India Small Cap, Parag Parikh Flexi Cap and Helios Flexi Cap.
What the dispersion signals
bl.portfolio said it generally refrains from issuing recommendations on funds with less than seven years of performance history for equity and hybrid funds and five years for debt funds, and noted the two-year analysis is not a recommendation or a definitive assessment of these funds. Instead, it offers a perspective on how active equity funds behaved in the market environment, positioned their portfolios and performed against peers and benchmarks.
Returns cited are compounded annualised growth rates (CAGR) for the two years ended August 10, 2026. The exercise looked beyond returns to drawdowns, risk-adjusted performance and investor experience through both lump-sum and SIP investments, according to bl.portfolio, highlighting which strategies dealt with the deceptively flat market most effectively.
For institutional investors allocating to Indian equities, the data indicate that active management worked best where fund managers had greater flexibility to exploit sectoral and stock-level opportunities. Outperformance rates varied sharply across categories, showing that fund selection and portfolio positioning mattered far more than the headline index return.
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