Understand the passive investing options across various asset classes such as equity, debt, and gold to form your investing strategy for wealth creation.
In the last few years, passive investing has been growing at a fast pace in India and across the world. The reason is simple - active funds in the equity and debt category are finding it difficult to generate higher returns as compared to their benchmark. In such a scenario, it is questionable whether an investor should pay the higher expense ratio for active funds compared to passive funds. Also, considering that many investors prefer passive investing, mutual fund houses have come up with various passive funds (index funds and ETFs) lately.
This article will discuss how an investor can follow a passive investing strategy with asset allocation to equity, debt, and gold through equity index funds, debt index funds, and gold fund of funds (FoFs).
Underperformance of active funds