When markets are driven by institutions, then investors don’t like to take fund manager risk. Compared to active funds, ETFs are more transparent
Passive investment funds like ETFs are big internationally, where fund manager plays no role in managing a fund. What is the reason?
In most countries, for the longest time fund managers were considered to be heroes, who were capable of generating returns higher than the Index on a consistent basis. But over time, passive funds - index funds started coming into markets, where the fund had stocks exactly in the same proportion as that on the Index. You could buy and sell the fund on exchanges, so cost was very little for managing and distributing the index funds.
This story is from the December 2017 edition of Outlook Money.
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This story is from the December 2017 edition of Outlook Money.
Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 9,000+ magazines and newspapers.
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