What is Passive Investing? How’s it different from putting your money through active investments? Explained
AI Summary
The rise of passive investing in India, particularly through index funds and ETFs, presents a compelling opportunity for retail investors seeking lower costs and diversified exposure. As more investors gravitate towards this strategy, it may lead to increased market efficiency and potentially lower volatility. However, investors must remain vigilant about fund selection and understand that while passive investing simplifies the process, it does not eliminate risk, especially in a fluctuating market environment.
Passive investing means putting money into investments that follow a market index. The aim is to earn returns close to that index, after accounting for costs. It usually involves holding investments for years and avoiding frequent buying or selling.
An index measures the performance of a group of investments. In India, examples include the Nifty 50 and Sensex. Think of an index as a basket containing shares from different companies. A fund that follows that index aims to replicate the basket and its proportions.
Original Article
Published on Livemint
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This is a results news update from Livemint, published on 26 September 2026.
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