Equity funds lag own benchmarks

CRISIL, India's largest ratings agency has observed that over a five year period majority of equity funds underperformed the benchmark index. Similar studies have been done in the US as well. And they have come to the same conclusion. Related Link

After all Fund Managers, Research Analysts, support staff with superior educational backgrounds are expected to exceed the benchmarks but 2/3 of Funds have failed. Don't blame them it is the fault of system. We see lot of Ads showing that funds give excessive returns then who is to be believed ?

You would be surprised that both are true. We see advertisements of specific schemes but rarely a fund house declares results of all its schemes. So chances are that you won't find aggregate results and the top 1/3 keep changing the probability that you reap returns above average are remote. We at least won't add schemes. So we believe that our task of continuously beating index is not easy but a lot tougher.