Active vs Passive: A Look at Angel One Nifty Total Market Index Fund

Investing is a journey that can feel like navigating a maze—there are numerous options to choose from, each promising to lead you to financial success. Among the most popular choices are Exchange-Traded Funds (ETFs) and actively managed mutual funds. But, the question remains: Can active managers beat the market? And how do ETFs stack up in comparison? Let us find answers in this blog

What Are ETFs and Actively Managed Mutual Funds?

ETFs (Exchange-Traded Funds) are investment funds that hold a collection of assets, such as stocks, bonds, or commodities, and trade on stock exchanges much like individual stocks. They aim to replicate the performance of an index, like the Nifty 50 and typically have lower fees due to their passive management approach.

Actively Managed Mutual Funds, on the other hand, are overseen by professional fund managers who make decisions on which securities to buy and sell. The goal is to outperform a benchmark or index by selecting investments that will beat the market, often making them more expensive in terms of fees due to the hands-on approach.

Advantages of ETFs

• Lower Fees: ETFs typically charge much lower expense ratios than actively managed mutual funds because they don’t require a team of managers to make investment decisions.
• Diversification: With a single investment, ETFs provide exposure to a wide array of stocks, sectors, or bonds.
• Transparency and Liquidity: ETFs are traded on exchanges and can be bought and sold throughout the trading day, offering flexibility and ease of access.

Advantages of Actively Managed Mutual Funds

• Potential for Outperformance: The big draw is that a skilled manager can select stocks, bonds, or other securities that outperform the market, potentially generating greater returns.
• Flexibility: Managers can adjust the portfolio’s composition based on changing market conditions, economic trends, or new information.
• Risk Management: Active managers may take steps to reduce risk through diversification, hedging, or avoiding sectors or stocks that seem overpriced or risky.

Angel One Nifty Total Market Index Fund

As the Indian investment landscape evolves, investors are faced with an increasing array of options. Among the most popular investment vehicles in India are Exchange-Traded Funds (ETFs) and actively managed mutual funds. Each offers its own set of advantages, and many investors wonder whether active managers can consistently beat the market.

Recently, Angel One MF launched its new product, the Angel One Nifty Total Market Index Fund, which replicates and tracks the performance of the Nifty Total Market Index—further adding to the growing trend of passive investing.

The investment objective of the Angel One Nifty Total Market Index Fund is to replicate the Nifty Total Market Index to provide returns before expenses that track the total return of the Nifty Total Market Index, subject to Tracking Errors. However, there can be no assurance or guarantee that the investment objective of the Scheme will be achieved.

Conclusion

Investing requires careful consideration of your goals, risk tolerance, and time horizon. Whichever option you choose, it’s essential to stay informed, avoid making emotional decisions, and stick to your long-term plan.

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Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.

Mutual Fund investments are subject to market risks, read all scheme-related documents carefully.