The passive mode of investment through exchange traded funds (ETFs) is gaining ground in India, similar to developed countries. This was about double of the inflows in large-cap funds and half of the total inflows in equity funds during the period. An active fund manager of a large-cap fund would find it difficult to beat highly polarised index returns. Its share in the total equity AUM rose by 200 basis points to 17.7% since the beginning of the fiscal.In the US, the gap between the AUMs of active and passive funds has narrowed significantly over the past decade. Currently, the passive funds’ AUM is $8.6 trillion compared with $11.8 trillion for the active funds.

Source: Economic Times January 02, 2020 00:00 UTC