The debate between choosing actively managed mutual funds and passively managed schemes like index funds or exchange-traded funds (ETF) has got shriller with the announcement of the government’s plan to introduce Bharat 22 ETF.Should you opt for it? This is because the actively managed funds continue to outperform their benchmarks. This will bring down the alpha generation capacity (of actively managed funds),” says Ankur Kapur, Managing Partner, Plutus Capital. AUM as on 30 Jun 2017.ETFs are a subset of low-cost index funds. “In case of index funds, or actively managed funds (unlike ETFs), investors can sell units back to the fund houses without any impact cost.

Source: Economic Times August 14, 2017 00:56 UTC