Passive mutual fund assets spike 31% to ₹8.74 lakh crore in a year, says report
reported Business Line. The assets under management of passively managed schemes have rallied 31 percent to ₹8.74 lakh crore last month against ₹6.65 lakh crore logged in January, largely driven by new fund offers and increased inflows into index funds, it said. In fact, passive funds accounted for 21 percent of overall AUM of ₹42.04 lakh crore as of December-end, according to the Association of Mutual Funds in India data, as per the report.
The AUM of actively managed funds was up 28 percent to ₹41.74 lakh crore last year against ₹32.67 lakh crore in January. Despite record collection through new fund offers, the huge outflows and weak performance from debt funds have mellowed down the performance actively managed funds last year, said the report. Passive funds are gaining ground both in city and smaller town due to its uncomplicated investment structure and lower cost, said Vishal Jain, CEO, Zerodha Fund House, the report mentioned.
With most of the analysts talking of rally in benchmark indices, he added, that first-time investors are really excited to invest in passive products and it is the best way for such investors to enter equity market before graduating to other products, it said. Among passive offers, index funds have registered the highest gain of 49 percent to ₹2 lakh crore ( ₹1.34 lakh crore), according to the report. In fact, the number of index funds has increased by 44 to 196 (152) in the last one year as the industry played to the gallery by launching NFOs to attract fresh investment.
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