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The Morning Brief

The Pros and Cons of Passive Investing

Jan 4, 2025
Pratik Oswal, head of passive funds at Motilal Oswal Mutual Fund, teams up with Feroze Azeez, Deputy CEO of Anand Rathi Wealth, to dive into the booming world of passive investing. They discuss the remarkable growth of index funds and ETFs, highlighting their rise from 13% to a projected 40% of assets in India by 2027. The duo debates the merits of passive versus active management, emphasizing how investor behavior impacts returns. Tune in for insights on navigating mutual fund choices and the need for a balanced investment approach.
22:35

Podcast summary created with Snipd AI

Quick takeaways

  • The rise of passive investing reflects a notable shift towards lower-cost, diversified funds that outperform many actively managed options over time.
  • The podcast highlights the complexity of investment choices available today, emphasizing the need for investors to adopt a balanced approach between passive and active strategies.

Deep dives

The Rise of Passive Investing

The growing popularity of passive investing is highlighted by a significant increase in the number of index funds and exchange-traded funds (ETFs) launched recently. Investors are increasingly attracted to these products because they are cost-effective and often outperform actively managed funds over time. The interview reveals that the definition of passive investing has broadened, moving beyond traditional options like Nifty and Sensex to encompass various sectors, themes, and even international investments. A survey found that 61% of investors prefer thematic sector funds, indicating a shift towards a more diversified approach in passive investing.

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