Archive · 9 Dec 2025
Passive vs Active Funds Debate Intensifies in India
There's a big discussion in India about whether passive or active investment funds are better.
Passive funds, which follow the market, have grown a lot and given good returns.
But in tough times, active funds, where experts pick stocks, have done better.
Some people, like Hemen Bhatia from Angel One, think passive funds should be the main part of your investments.
Others, like Nimesh Shah from ICICI Prudential, believe active funds are still the best because they can beat the market.
Both types have their good points, and investors are trying to decide which one to choose.
Passive funds in India have grown significantly, with assets under management increasing from ₹1.6 lakh crore in March 2020 to ₹13.3 lakh crore by October 2025.
Passive funds have delivered annualised returns of around 18% for Nifty 50 and 21% for Nifty Total Market from November 2020 to October 2025.
Actively managed small and flexi cap schemes have performed better than their index counterparts in the past year, with less loss.
The number of index funds launched has surged 42% from last October to 345 as of October end.
Nimesh Shah of ICICI Prudential AMC advocates for active funds, citing their ability to beat the index and generate alpha.
- Who
- Hemen Bhatia (Angel One AMC) and Nimesh Shah (ICICI Prudential AMC)
- What
- Debate on the merits of passive vs. active investment funds
- When
- Data cited from March 2020 to October 2025
- Where
- India
- Why
- To discuss the performance and future of passive and active investment strategies
- Passive AUM Growth
- ₹1.6 lakh crore to ₹13.3 lakh crore (March 2020 to October 2025)
- Annualised Returns (Nifty 50)
- 18% (November 2020 to October 2025)
- Annualised Returns (Nifty Total Market)
- 21% (November 2020 to October 2025)
- Index Funds Launched
- 345 (as of October 2025)
- Smallcap Index Funds Return
- -13.2% (one year)
- Actively Managed Smallcap Funds Return
- -10.66% (one year)
- Flexi-cap Index Funds Return
- -5.7% (one year)
- Actively Managed Flexi-cap Funds Return
- -1.36% (one year)
- Large & Midcap Actively Managed Funds Return
- -3% (one year)
- Large & Midcap Index Funds Return
- -4.6% (one year)
