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Given the rising popularity of passives, Cafemutual recently conducted a survey to capture the pulse of MFDs on passive funds.
The survey garnered 968 responses which reveals that the majority of MFDs are likely to recommend passive funds to their clients.
The survey asked - Considering the declining alpha in a few scheme categories like large cap funds, how likely are you to recommend passives? 57% of the respondents said they are very likely to suggest passive funds.
The survey also reveals that 40% of MFDs are already recommending passives to clients. Another 42% would recommend passives after exploring them personally. Only 18% MFDs said that they would not recommend passives.
Viral Bhatt of Money Mantra, Mumbai feels that it makes sense to explore Nifty or Sensex-based passive funds. He said, “Keeping in mind the falling alpha in the large cap space, I am likely to recommend passive funds in this category.”
Rahul Jain of GR Finvisors, Udaipur feels that many passive funds outperform their active peers. He said, “Passives by definition replicate the benchmark and if you look at Sensex, the top five weights form 45-50% of the overall index.”
“I typically advise passive funds for investors wanting to keep investing simple. Currently, 15-20% of my clients invest in passive large-cap and international funds.”
To give you more clarity on passives, Cafemutual is holding India’s first event focusing on passives titled Cafemutual Passives Conference 2022. The event will have best in class speakers who will help you prepare for the Passives - ‘The New Frontier’!
You can learn more about the event by clicking here.
