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Can passive funds lead to wealth erosion?

It is imperative to understand the incentives of MF distributors and their role in the investment process

January 03, 2020 / 10:37 AM IST
Can passive funds lead to wealth erosion?

Rajiv Shastri In the first part of this note, we dealt with the nuances that passive funds introduce to the investment market and why they are preferred by institutional investors. We also discussed why incentives for individual investors differ from those of institutions and the contention that lower costs ensure better performance is a fallacious one. In this part of the note, we discuss the factors which contribute to relative performance and the role that ETFs can play in the portfolios...

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