Broader benchmark indices Sensex and Nifty spiked nearly 18.74 per cent and 20.03 per cent respectively in 2023. The market continued its gaining spree for the eighth year in a row.
The assets under management of passively managed schemes have rallied 31 percent to ₹8.74 lakh crore last month against ₹6.65 lakh crore logged in January, said the report.
Over long periods of time, not investing in mid- and small-cap stocks is highly suboptimal. Over five and 10 year periods, mid and small-cap fund categories have given higher returns than large-cap funds.
Why your investment portfolio needs a mix of active and passive mutual funds As index funds do not require fund management and research, these have much lower costs, which itself improves performance.
Synopsis
If all you aspire to do as an investor is to match the large-cap indexes, then this is fine. Over five and 10-year periods, mid-and small-cap fund categories have given higher returns than large-cap funds. The difference is not small.
If you are a mutual fund investor in India, then you are likely to have heard or read about how investing in index funds is now an increasingly attractive alternative to normal mutual funds. It’s becoming harder for large-cap funds to beat index funds on a sustained basis. A decade back, at any point, some 60-80% of actively managed large-cap funds would beat the Sensex and Nifty. Things are different now. For example, over the past five years,