50 passive mutual funds launched in 2021

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Passive investing is gaining popularity in India. Around 50 passive schemes garnered around Rs 1,50,000 crore AUM in 2021. Passive funds made their mark in the current year and managed to attract big inflows. The trend was not confined to large cap funds that were struggling to beat their benchmarks. Many other categories also witnessed the same trend. Mutual fund experts see this as a big win for passive investing in India.

Earlier, the talk about passive investing in India was only centered around their efficacy in the large cap space. Index funds were seen as an alternative for the actively managed large cap schemes that were struggling to generate extra returns over their benchmarks in the last three years. However, this year the passive funds made it to small, mid cap, international and sectoral segments as well.

Some of these passive funds also attracted big inflows during the NFO period. For example: Kotak Global Innovation FOF and Axis Global Innovation FoF collected Rs 1680.89 crore and Rs 1625.83 crore respectively in their NFO period.

Among the top 10 large cap schemes on the return charts, six are passively managed. However, actively managed schemes have managed their lead in categories like small and mid cap funds.

Some more interesting data points to the increasing popularity of index based investing. There are around 170 passive schemes in India. SBI ETF Nifty 50 fund is India’s largest fund with AUM of Rs 1,18,703 crore as of November 2021. According to a report published by Finity, a fintech specialising in passive and direct mutual fund schemes, in September, 2021- passive assets, customer folio accounts in passive assets, passive products (ETFs & Index), and passive assets as a percentage of overall assets have more than doubled in the previous five years.

Here’s a look at some of the schemes that were launched this year in different categories:

Scheme name
Launch date
Nippon India Nifty Midcap 150 Index Fund Midcap 17-Feb-2021 227 Cr
Aditya Birla Sun Life Nifty Smallcap 50 Index Fund Smallcap 1-April-2021 40 Cr
SBI Nifty Next 50 Index Fund Largecap 19-May-2021 371 Cr
Axis Technology ETF Sectoral 25-Mar-2021 23 Cr
ICICI Prudential Healthcare ETF Sectoral 19-May-2021 97 Cr
Mirae Asset NYSE FANG+ ETF International 06-May-2021 1,360 Cr
ICICI Prudential Consumption ETF Thematic 29-Oct-2021 2 Cr
SBI ETF Consumption Thematic 22-Jul-2021 15 Cr

Mutual fund experts believe that even though passive schemes have taken more space, they will not replace active management in India in the near future. However, the passive space is likely to grow more in the coming days. Many mutual fund houses have filed documents to launch passive schemes in 2022.

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