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Mutual Fund Industry Trends: Passive funds are currently dominating the rapidly growing mutual fund industry in the country. In 2024, the folio or account number of investors of passive funds including index funds and exchange traded funds has increased by 37 percent. Whereas the total asset under management has increased by more than 24 percent and has crossed Rs 11 lakh crore.
What do AMFI figures say?
According to data from the Association of Mutual Funds in India (Amfi), mutual fund houses launched a total of 122 new passive fund schemes in 2024. Nippon India Mutual Fund, one of the most prominent companies in the fund industry, now has 1.46 crore folios in passive funds. Its AUM is Rs 1.65 lakh crore and accounts for 55 percent of the trading volume of ETFs. Other fund houses like Kotak Mutual Fund, Axis and Motilal Oswal Mutual Fund have also registered better growth in passive funds.
Net exposure increasing in passive funds
Passive funds make an interesting offering, says Arun Sundaresan, head of ETFs, Nippon India Mutual Fund. Funds provide pure exposure to different parts of the market, making them true, true label products. There are lots of unique funds, offering very different portfolios and a variety of risk-return profiles for investors to choose from.
AMC is continuously launching many passive funds
Seeing the increasing interest of investors in choosing this category, other AMCs have also launched many passive funds. Passive funds have also attracted investors because they have low cost structures and are easy to understand, making them an attractive option for both retail and experienced investors. Nippon India Mutual Fund launches 8 new funds in passive category in 2024. It now has 24 ETFs and 21 index funds in the industry.
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