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Index funds in India have gained popularity due to awareness initiatives and innovative benchmark schemes. They replicate a stock market index and aim to match the returns of the benchmark.
Global passive equity funds' net assets surpassed those of their active counterparts for the first time in 2023 as investors increasingly sought lower-cost funds that mirror broad market indices. According to LSEG Lipper, global passive equity funds' net assets stood at a record $15.1 trillion at the end of December while those of active funds was $14.3 trillion. Passive funds, often associated with stable, large-cap stocks with strong fundamentals and lower volatility, have grown in popularity since the 2008 financial crisis as investors sought safety in periods of uncertainty.
As of December end, there were 539 mutual fund schemes, with a total investment of Rs 2.17 lakh crore in the lender. HDFC Bank has the highest weightage in the Nifty 50 index among all the stocks, at 13.52 percent.
Most actively managed funds and active ETFs globally have failed to beat their benchmarks in 2023, research by LSEG Lipper has found.
The small-cap segment offers lucrative investment opportunities but is prone to significant fluctuations and risks, necessitating strategic and cautious approaches for investors.