Index investing (passive investing) has become increasingly popular in the last decade across the world. Trillions of dollars have flown out of active mutual funds into low-cost index funds. But in India, these are still early days for indexing, we just have about Rs 7700 crores in index funds. Although Rs 1.6 lakh crores is invested in index exchange traded funds (ETFs), most of it from the Employees' Provident Fund Organisation (EPFO) and retail investors predominantly invest in index mutual funds. In the past few years, there has been small by steadily increasing chatter about the merits of low-cost index funds in India. Given the growing underperformance of actively managed large-cap funds, there also seems to be a growing realization that low-cost index funds may be the best way to get large-cap exposure. In the last few months, Motilal Mutual Fund has launched a s uite of index funds tracking the Nifty 50, Nifty Next 50, Nifty Midcap 150, and Nifty Smallcap 250, and Nifty 500 indices.

In this sweeping conversation with Pratik Oswal, Head - Passive Funds at Motilal Oswal Asset Management Company talks to Prateek Singh (Founder of LearnApp) about:

How he got started in finance
What are index funds and how do they work?
The basics terminology of index funds
Impact and importance of costs when investing in mutual funds
His take on the active vs passive debate
Are index funds the best way to get large-cap exposure?
Liquidity concerns in midcap and smallcap stocks
Growth of index funds in India
Scope of smart beta funds in India
Portfolio construction with index funds
Motilal's previous experiment with index funds

Note: The latest AUM in index funds is Rs 7717.16 crores. When the podcast was recorded it was just a little over Rs 6500 crores.

Should you invest in index funds? Getting passive with Pratik Oswal