Fund comparisons / 5 min read
Are Index Funds Better Than Active Funds? Historical SIP Returns
Nine active funds, three market segments and the same starting dates. Let's see where the historical leaders changed.
In the NIFTY 50 story, we compared funds following the same index. Now let's ask a different question: could a fund manager have done better?
An index fund follows the companies in an index. An active fund has a manager choosing what to buy and sell. Let's compare the results, one group at a time.
It gets less simple when we choose the comparison. A small-cap fund and a large-cap index take different risks. A fund starting after a crash did not face the same journey as one starting before it.
First, we need to decide which funds belong in the same comparison.
Step 1: Choose the funds
This historical study selected three active funds in each market segment. The original selection used fund size as a starting point, rather than searching the whole universe for the best past returns.
| Mid-cap | HDFC Mid Cap, Kotak Midcap, Nippon India Growth Mid Cap | NIFTY MIDCAP 150 |
| Large-cap | ICICI Prudential Large Cap, SBI Large Cap, Nippon India Large Cap | NIFTY 50 and NIFTY NEXT 50 |
| Small-cap | Nippon India Small Cap, SBI Small Cap, quant Small Cap | NIFTY SMALLCAP 250 |
These are selected surviving funds, not a census of the industry. And NIFTY NEXT 50 is an additional comparison, not an interchangeable benchmark for every large-cap fund.
The fund series begin in 2013 or later. For each holding period, the head-to-head test uses the start and end dates available for every investment in its group.
Step 2: Run the same SIP from different dates
The test invests ₹10,000 each month for three, five, seven or ten years. It calculates the annualised return using XIRR, then repeats from the next available start.
For example, we invest ₹10,000 every month for five years. Then we move the starting date forward by one available trading day and run another five-year SIP.
For each shared period, we check which investment ended with the highest return. We count those first-place finishes across the group.
This measures how often an investment ranked first, not how often it beat one particular rival. A fund can finish second in every period and have no first-place wins, even if it repeatedly beats several other funds.
Mid-cap: one leader became more prominent
Choose a holding period
Which fund finished first over 3 years?
First among this group on shared dates. This is not the probability of a future win, or a pairwise win rate against each fund.
Explore all the numbers
| Investment | First-place periods | Compared periods | Share finishing first |
|---|---|---|---|
| Kotak Midcap Fund | 1,354 | 2,479 | 54.62% |
| HDFC Mid Cap Fund | 743 | 2,479 | 29.97% |
| NIFTY MIDCAP 150 | 193 | 2,479 | 7.79% |
| Nippon India Growth Mid Cap Fund | 189 | 2,479 | 7.62% |
Values retain the original calculation precision until display. Download the evidence (JSON)
Showing 3 years.
In the three-year test, Kotak Midcap finished first in 1,354 of 2,479 shared periods. HDFC finished first in 743. The index and Nippon India shared the remaining first-place finishes.
Switch to ten years. Kotak finished first in 749 of 755 periods; HDFC led in the other six.
That is a clear result for this selected group and sample. But it does not tell us the size of the lead, the drawdowns involved, or whether a new investment will repeat it. First-place frequency needs those other measurements beside it.
Large-cap: the result depended on the fund
Choose a holding period
Which fund finished first over 5 years?
First among this group on shared dates. This is not the probability of a future win, or a pairwise win rate against each fund.
Explore all the numbers
| Investment | First-place periods | Compared periods | Share finishing first |
|---|---|---|---|
| Nippon India Large Cap Fund | 622 | 1,986 | 31.32% |
| NIFTY NEXT 50 | 550 | 1,986 | 27.69% |
| NIFTY 50 | 545 | 1,986 | 27.44% |
| ICICI Prudential Large Cap Fund | 171 | 1,986 | 8.61% |
| SBI Large Cap Fund | 98 | 1,986 | 4.93% |
Values retain the original calculation precision until display. Download the evidence (JSON)
Showing 5 years.
Here the short and long tests tell different stories. At five years, first-place finishes were spread across Nippon India Large Cap, NIFTY NEXT 50 and NIFTY 50, with smaller shares for ICICI Prudential and SBI.
At ten years, Nippon India Large Cap led 76.82% of the shared periods, while NIFTY NEXT 50 led 19.60%.
The result does not support “active always wins” or “passive always wins.” It describes different outcomes for specific investments, with different portfolios and exposures.
Small-cap: the leader changed with the horizon
Choose a holding period
Which fund finished first over 3 years?
First among this group on shared dates. This is not the probability of a future win, or a pairwise win rate against each fund.
Explore all the numbers
| Investment | First-place periods | Compared periods | Share finishing first |
|---|---|---|---|
| quant Small Cap Fund | 1,089 | 2,257 | 48.25% |
| SBI Small Cap Fund | 846 | 2,257 | 37.48% |
| Nippon India Small Cap Fund | 322 | 2,257 | 14.27% |
| NIFTY SMLCAP 250 | 0 | 2,257 | 0.00% |
Values retain the original calculation precision until display. Download the evidence (JSON)
Showing 3 years.
quant Small Cap had the largest share of first-place finishes in the three-, five- and seven-year tests. At ten years, Nippon India Small Cap led 95.34% of shared periods.
The index did not finish first in any period in these selected comparisons. That does not establish that it lost to every active fund in every period. The first-place table alone cannot answer that pairwise question.
Think of a race: knowing who came first does not tell us the order of everyone behind them.
What does this settle about active and passive?
A broader active-versus-passive question needs a broader dataset, including funds that merged or closed. S&P's SPIVA research examines active managers against category benchmarks. Its universe and methodology differ from this nine-fund study, so the results should not be treated as interchangeable.
Compare a mix in Strategy LabLook at the rupee outcomes, consistency and weaker periods alongside the benchmark.Data sources and the limits of this study
This story uses the saved January 2026 head-to-head analyses for the mid-cap, large-cap and small-cap groups. Fund NAVs came through MFAPI; index data came from NSE total-return series. Download the source-derived summaries.
NAV returns already reflect ongoing fund expenses. The index reference does not incur investable fund expenses. Investor taxes and exit loads are not modelled here.
The study uses selected surviving funds and overlapping periods. A low or zero first-place frequency is not the same as a negative return. The first-place count does not show the size of the return gap or the biggest fall during each investment.
