We can thus conclude that not only has the outperformance of large-cap equity mutual funds as an asset class more or less vanished, but there is randomness even in the relative performance of mutual funds. The inconsistency in the mutual funds’ relative performance also shows us why the past performance of a fund does not indicate future outperformance. All this is compelling evidence that the Indian market is becoming more efficient. In such a scenario, it is difficult to see how these funds will be able to keep attracting investors if they keep charging such high fees.
