Passive mutual funds deliver up to 98% return in FY24. Is active investing useless?
mutual funds in FY24 (April 1, 2023 to date). They have offered an average return of around 34.86% during the period.
CPSE ETF, the topper on the list, offered 97.76% in FY24. Motilal Oswal S&P BSE Enhanced Value ETF offered 86.87%.
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View Details» <div data-placement=«Mid Article Thumbnails» data-target_type=«mix» data-mode=«thumbnails-mid» style=«min-height:400px; margin-bottom:12px;» class=«wdt-taboola» id=«taboola-mid-article-thumbnails-108766952»>Around 80 passive mutual funds have given over 50% during the same period.
Also Read | Best equity mutual funds deliver up to 84% return in FY24. Do you own any?
Berkshire Hathaway Chairman Warren Buffett said investors should “stick with low-cost index funds.” Once at a Berkshire shareholder meeting in 1993, Buffett said: “By periodically investing in an index fund, for example, the know-nothing investor can actually outperform most investment professionals. Paradoxically, when ‘dumb’ money acknowledges its limitations, it ceases to be dumb.”
ETMutualFunds recently analysed the performance of active mutual funds in FY24. Toppers offered up to 84% during the period. Around 60% active equity mutual funds underperformed against their respective benchmarks, majority were from small and midcap categories. How do you see this performance?
“Diversification across different funds, styles and AMCs is the key to minimise underperformance risk at the portfolio level. There are funds in the active flexi, mid and smallcap categories, which have shown consistent outperformance on a 10-year daily rolling returns basis. It is very normal for active funds to underperform in the short-
