Passive funds are gaining traction as the assets under management (AUM) have shot up to Rs 5.8 trillion in the first half of the current financial year, a rise of four times in the last five years.
Under-performance of most active funds as compared to the benchmark, lower expenses and investments by domestic institutions such as Employees’ Provident Fund Organisation are driving AUM of passive funds.
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As a share of the total AUM, passive funds now account for 15% now as compared to 5.7% in FY19.