Ch.11 · Scheme Performance Disclosure Rules · medium
A large-cap mutual fund's 3-year return is 13% while the Nifty 100 TRI benchmark returned 14% over the same period. What should an investor conclude?
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EXPLANATION
When a fund underperforms its benchmark, particularly over a 3-year period, it suggests active management has not justified its higher TER. A passive Nifty 100 index fund (with much lower TER) would have delivered better returns. This is a key consideration in fund selection.
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