Only thing that matters is whether active funds are able to generate alpha over index funds over long-term basis. Otherwise, passive funds will see higher inflows which will keep on depressing the margins of AMCs, although growth in AUM is guaranteed in India.
Now my concern is that a great investor like Warren Buffett advices common man to invest n passive funds because he feels active funds can’t beat indices over long-term with all the associated cost. Infact, he practically proved his point in 2015 or 2016 when over a 10-yr period, he generated ~ 10% returns in S&P 500, more than any of the other hedge funds whom he challenged in 2005.
| Subscribe To Our Free Newsletter |
