Passive investing in India through mutual funds has picked up growth in recent years. At ₹5.3 lakh crore AUM size, this accounts for 14 per cent of the ₹37 lakh crore industry pie. While a large part of the passive fund inflows today is thanks to the Employees’ Provident Fund Organisation (EPFO) investing in ETFs based on Nifty 50, Sensex, CPSEs and Bharat 22 indices, cost-conscious investors are also joining the bandwagon of late. This is due to the diminishing alpha in certain segments of MF space. In terms of asset-classes, passive products investing in equities hog the limelight while ETFs and FoFs dominate the space when seen from product structure perspective.
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