As on 30th September 2015, the one year return of Sensex was -1.79%. During the same period the CRISIL AMFI equity performance index, which is an index to measure the performance of actively managed funds in India, has provided a one year return of 9.44%. An alpha of 11.23%.
I’ve written an article earlier as to how this CRISIL AMFI index has delivered a return of 22.74% for the period 1’st April 1997 (the date this index was constituted) to 31’st March 2015. During the same period Sensex has provided an annualised return of 12.36%. So CRISIL AMFI index has generated an alpha of 10.38% over 18 years.
Alpha denotes the margin by which mutual funds have outperformed the indices.
For the last 18.5 years (as on 30the September 2015), actively managed funds have delivered annualised return of 21.86%.
Though Sensex itself has provided decent returns over long run, actively managed equity funds (where you invest your money) has done phenomenally well in India.
The CRISL AMFI Equity fund index has never given a negative return for any 5 year period on a daily rolling basis since inception.
Though for convenience we use Sensex in many illustrations, please note that actively managed funds have done much better than Sensex.
Focus on funds.