There are a lot of smallcases which have a benchmark other than Equity Large Cap, Mid Cap, Small Cap. Even still, the benchmarks and past performance shown are only against these three.
Other indicies like Nifty Microcap or Nifty Alpha or Nifty Momentum should also be included to help better gauge if these smallcase portfolios are actually generating any alpha compared to their respective benchmarks and not the standard market indices.
For example- Quantace Microcap(Monthly Picks) smallcase | Managed by Quantace Research
The description very clearly states that the benchmark to consider should be Nifty Microcap 250. But the past performance comparison is given against Small cap index.
This is inherently misleading. The graph shows that this portfolio has beat the index, however, the wrong index!
I don’t think there is any fault on the part of the fund manager. In this case they are very clearly making the declaration of the correct benchmark. It’s the smallcase platform that’s missing more indices.
Some other managers seem to exploit this and try and compare the returns from a much riskier method to the simple equity indices without giving such disclaimers.