Investors who want to take exposure in equity through mutual funds, have the option of choosing actively managed funds or passive funds. Active funds are those where the fund managers decide which stocks to include and which to leave out of the portfolio.
Passive funds, on the other hand, don’t have fund managers deciding the portfolio. Rather, the stocks are selected according to a chosen index.
Exchange traded funds (ETFs) are a type of passive funds where the portfolio mirrors an index of stocks and the proportions they are held in. Investors can choose either active or passive funds based on their requirements and preferences. Here are some reasons why passive funds like ETFs may suit you.
