Why the time of do-it-yourself investing might just have arrived
SummaryThe below-benchmark returns of a big proportion of mutual funds make passive funds attractive
Over a 10-year period as of February, only two out of five regular mutual fund (MF) schemes in India gave returns which were either equal to or higher than their benchmark. The performance of a scheme is measured against a benchmark, which represents the broader market. For example, the benchmark of a large-cap scheme might be the Nifty 50 index. The idea being that by investing in an MF, investors are seeking expertise to manage money. And this expertise needs to generate a higher rate of return than the overall market represented by the benchmark. But data suggests that isn’t really the case.