8 Indian Mid-Cap Funds Underperform Benchmarks: Negative Alpha

Eight mid-cap mutual funds in India registered negative alpha as of June 30, 2026, signaling underperformance against their respective benchmarks. This data, compiled by Value Research, highlights a key metric for investors evaluating actively managed funds.

The concept of alpha measures a fund’s outperformance or underperformance relative to its benchmark, adjusted for risk. A negative alpha signifies that the fund delivered returns lower than its benchmark, even if the absolute returns were positive. This distinction is crucial for assessing fund manager efficacy.

Key Underperformers by Alpha

The latest Value Research data reveals specific funds that posted negative alpha figures:

• Taurus Mid Cap Fund: -7.20
• PGIM India Mid Cap Fund: -3.89
• UTI Midcap Fund: -3.62
• SBI Midcap Fund: -3.22
• Quant Mid Cap Fund: -1.01
• LIC MF Midcap Fund: -0.46
• DSP Midcap Fund: -0.20
• Franklin India Mid Cap Fund: -0.16

Despite a negative alpha, funds can still generate positive absolute returns for investors. For example, the Taurus Mid Cap Fund, which recorded the lowest alpha at -7.20, still delivered a 3-year Compound Annual Growth Rate (CAGR) of 11.87% and a 5-year CAGR of 12.61%.

Beyond Alpha: Holistic Evaluation

Investment strategists caution against solely relying on alpha as the definitive performance indicator. A comprehensive assessment requires considering multiple factors to ensure alignment with long-term financial goals.

• Compound Annual Growth Rate (CAGR)
• Risk profile and management
• Expense ratio
• Portfolio quality
• Fund manager’s track record
• Personal investment objectives

These parameters collectively offer a more complete picture of a mid-cap fund’s suitability for an investor’s portfolio, extending beyond its benchmark-relative performance.