Passive mutual funds may be collecting more assets, but the real challenge is investor expectations. Passive investing tracks benchmarks, meaning you forgo the opportunity to earn alpha through outperformance, even after costs. Active managers can still generate alpha despite expenses, while passive funds mainly protect investors from falling behind—reducing the appeal for those seeking upside.
After Covid’s second wave, 92% of active managers failed to beat the index, while passive inflows surged. About INR 7,500 crore a month is reportedly flowing into equity ETFs, many linked to EPFO. Critics argue this consistent buying is inflating Nifty 50 prices, but the bigger question is whether the market’s balance is quietly shifting.
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Zerodha is expanding its Coin platform into a broader passive wealth management hub, adding fixed deposits alongside existing offerings like mutual funds, NPS, and insurance. The firm is also looking at distributing bonds, positioning Coin as a single place for investors who prefer non-active management of their money.
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