Large-cap funds lose alpha edge post-2010

Large-cap funds posted strong alpha of 4.5% to 4.9% against Nifty 50 TRI from 2000 to 2009.

Between 2010 and 2019, alpha narrowed to around 1% as funds still outperformed the Nifty 50 TRI.

After 2020, large-cap funds underperformed with negative alpha: -0.6% over 3-year and -1.3% over 5-year rolling returns.

Factors behind declining alpha include increased market efficiency and passive investing growth.

Investors are advised to reassess expectations and consider low-cost passive options for large-cap exposure.