The broader equity market has faced challenges over the past two years, with benchmark indices delivering negative returns on a compounded annual growth rate (CAGR) basis. The BSE Sensex declined 2.25% CAGR, while the Nifty 50 fell 1.14% during the period. However, some mutual funds managed to deliver double-digit gains despite the broader market weakness.
The three funds that outperformed belong to the mid-cap, small-cap and multi-cap categories, which have a different market exposure compared with the large-cap-heavy Sensex and Nifty 50. This raises questions about what drove their performance, whether the gains can continue, and how investors should approach active and passive funds amid changing market conditions.
