Over the last 5-10 years, passive funds have surged in size and popularity in India as Well as in the international markets like the US. In the US, the assets in passive funds has grown four times in the past decade from $3.2 trillion at the end of 2013 to $15 trillion at the end of 2023. Says Anil Ghelani, CFA, head - passive income and products, DSP Mutual Fund: "With passive funds witnessing positive flows consistently over the past decade, for the first time in history of the US mutual fund industry, the assets under management (AUM) of passive funds has crossed that of active funds."
In India, the share of passive funds' AUM has doubled from 8 per cent of the mutual fund industry AUM in August 2020 to 16 per cent in August 2024. In just one year, as of August 2024, the AUM of passive funds has increased from ₹7.58 trillion to ₹10.96 trillion, a growth of 45 per cent. In the last three years, passive funds got a higher net inflow compared to active funds in the large-cap category. According to experts, this trend is likely to continue.
"While in some global markets like the US, we have already seen passive funds taking over in size; in India we are seeing a gradual growth. In my view, together with growth in the overall industry, we will see this (passive funds') proportion increase to 25 per cent in the next 3-5 years," says Ghelani.
This evolving scenario gives rise to the question: are passive funds outperforming active management, or are they creating a more competitive and cost-effective option that ultimately benefits the investors?
The Turning Point
Historically, passive funds were closely linked to index investing, primarily focused on replicating the performance of broad equity indices,such as the Nifty and the Sensex.
Denne historien er fra November 2024-utgaven av Outlook Money.
Start din 7-dagers gratis prøveperiode på Magzter GOLD for å få tilgang til tusenvis av utvalgte premiumhistorier og 9000+ magasiner og aviser.
Allerede abonnent ? Logg på
Denne historien er fra November 2024-utgaven av Outlook Money.
Start din 7-dagers gratis prøveperiode på Magzter GOLD for å få tilgang til tusenvis av utvalgte premiumhistorier og 9000+ magasiner og aviser.
Allerede abonnent? Logg på
Stay Ahead Of AI-Powered Cyber Fraud
AI has become an integral part of our lives, right from customer service at banks to insurance claims. But it has now become a powerful arsenal for the fraudsters too who are increasingly using AI to scam individuals and corporations alike to commit fraud. The key is to stay vigilant
Travelling To Europe? Pack In The Essential Covers
Smart travellers must know that insurance is a must-have. From essential health coverage to theft protection and trip interruptions, know what you need for a worry-free Europe trip
How To Spend Wisely This Year-End
We all spend during the year-end. But the trick is not to overspend or borrow, either from friends, or your own investment, to fund your indulgence. Maintaining balance is the key
Travel Now Pay Later (TNPL)
Travel now, pay later (TNPL) is a close cousin of the more popular buy now, pay later (BNPL) schemes.
12 Books Devina Mehra Loved Reading In 2024
Listing books of her choice, among the ones she reads during the year, is ace investor Devina Mehra's favourite year-end activity. She says it's a daunting task to pick around 12 books from a list of 50.
Here's How To Avail Of Ayushman Bharat Yojana
Launched in 2018, the Ayushman Bharat Yojana aimed to provide health coverage to targeted benefi ciaries from the Socio-Economic Caste Census (SECC) 2011, based on deprivation and occupational criteria.
'Focus On The Business, Assess If You Want To Be A Partner For 10-20 Years'
Professor Sanjay Bakshi, a value investor, behavioural economist and adjunct professor at Flame University, Pune, gives his unique perspective on how to choose a stock, in an interview with Nidhi Sinha, editor, Outlook Money, as part of the Wealth Wizards series. He also shares his learnings from role models Warren Buffett, Charlie Munger, Benjamin Graham and others, and how being a chartered accountant, economist, investor and teacher make him into what he is today. Edited excerpts from the interview
The New Trump Card For IT, Pharma
Donald Trump has been re-elected as the 47th President of the US after a gap of four years. Here's how it will affect the Indian markets and how it will benefit sectors such as IT, pharma, export-oriented sectors and others
European Sojourn
Tight on budget? Dump the popular European destinations for the little-known wonders that are equally attractive
Gold ETFs And FoFs
While Indians love to invest in physical gold, even mutual funds offer the option, but in paper format.