India Trails US in Passive Investing Adoption

Passive investing in India has grown a lot in the last five years, but it's still much lower than in the US.

Hemen Bhatia from Angel One AMC explains why.

He says that more young investors are using passive funds like Index Funds and ETFs because they are easier to understand and cost less.

The Indian market is also more efficient now, making it harder for active funds to beat the market consistently.

However, India's asset management industry has been dominated by companies that offer both active and passive products, which has made it harder for passive investing to grow.

New companies that only offer passive products are now helping to educate investors about the benefits.

In the future, more investors are expected to use passive investing, especially with the help of digital platforms.

Bhatia also believes that core and satellite asset allocation, using broad market and Smart Beta index products, will be popular.

He assures that passive funds can handle large amounts of money and will be profitable as they grow.