The value of passive assets has nearly doubled over the last year

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It’s estimated that by 2025, the AUM of passive investment will have grown eight times from its present level of Rs 3 trillion to Rs 25 trillion, according to the ‘Passive Investing Report 2021 by the Finity an India’s one of the leading low-cost investment platform.

The research offers a comprehensive analysis of passive investing’s current position and future prospects in India and worldwide. One of the most promising ways to grow investors’ money is through passive investing.

Passive investment

The value of passive assets has nearly doubled over the last year. To put it simply, the low performance of active funds, reduced expenses of passive funds, and regulatory and government policies encouraging investment in passive investing products are all factors contributing to an increase in Indians’ desire to learn more about passive investing.

The Indian passive market has exploded in the previous five years, with assets rising by more than 1,200%. According to the research, passive assets under management have increased at a CAGR of 69% since March 2016 and will reach Rs 3,10,330 crore in March 2021 from Rs 22,409 crore now.

Several innovative products have been created in the Indian passive investment industry in the last few years, and there are currently over 160 different passive investment schemes available in India.

“We are delighted to launch the ‘Passive Investing Report 2021’ to create awareness amongst the investors on the lesser-known aspects of passive investing. Passive investing is emerging as an important part of investor portfolios. With the entry of Fintech companies in the asset management industry, the number of passive funds that are being launched every month is at an all-time high which has resulted in healthy competition and innovation in products,” said Abhilash Joseph, Business Head of Finity.

According to the end of March 2021 data, passive investment AUM in India was 10%, up from 2% in March 2016 as a percentage of the entire mutual fund sector AUM. This is a five-fold increase in five years. The passive funds market is expected to expand as the mutual fund industry grows and India’s economy grows at a faster rate.