Passive investment is attracting more and more funds compared to active funds. In one of the reports by Emerging Portfolio Fund Research (EPFR), a company that provides fund flows and asset allocation data, between 2007 and 2018, the Asset under Management (AUM) of passive funds has increased from USD 700 billion in the year 2007 to USD 3.9 trillion in 2018, showing an annual growth of 19 per cent. One of the reasons for such a rise in the passively managed funds is their performance. In a 10-year period in USA market, 89 per cent of the actively managed funds underperformed the passive funds. In case of mid-cap and small-cap dedicated funds, almost 93 per cent actively managed funds underperformed passively managed funds.
India is also catching up fast with the international trend and the reason remains the same-difference in returns. According to Refinitiv Lipper data, India’s passive funds have delivered an average return of 9.6 per cent so far this year, much higher than active funds’ 5.7 per cent. In 2018, passive funds posted 2.3 per cent gains, while active funds had negative returns. In terms of per cent, actively managed funds that underperformed passive benchmarks have increased in recent years.
AUM Trends
Denne historien er fra January 20, 2020 - February 02, 2020-utgaven av Dalal Street Investment Journal.
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Denne historien er fra January 20, 2020 - February 02, 2020-utgaven av Dalal Street Investment Journal.
Start din 7-dagers gratis prøveperiode på Magzter GOLD for å få tilgang til tusenvis av utvalgte premiumhistorier og 9000+ magasiner og aviser.
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