Axis Money IQ Knowledge Nugget - 133
Axis Mutual Fund
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Actively Managed Funds Or Passively Managed Funds Which One Is Better
Sheela, a 35-year old operations manager, had been investing in mutual funds using an mutual fund investment app for over a decade now. Even after investing for more than 10 years, the mutual funds in which Sheela was investing weren’t able to help her get closer to her financial goals. That is when she came across index funds but was unable to understand them completely. Unfortunately, like Sheela, there are millions of other mutual fund investors who are not well versed with the features and benefits of passive funds like index funds and ETFs and hence, refrain from investing in ?them. ? Some of you may not even know what passive funds are and how different they are from active funds. This blog aims to shed light on active and passive mutual funds. We also make an to explain the various aspects of both these funds and their investment styles. We hope that after learning the similarities and differences between active and passive funds you might be able to make an informed investment decision.?
What is active and passive management?
A mutual fund can either be actively managed or passively managed. Management of a mutual fund portfolio means how the designated fund manager picks underlying securities and buys / sells or holds onto them to help the scheme generate capital appreciation. These underlying securities which construct a mutual fund portfolio may vary from stocks, bonds, commodities, and other money market instruments. The fund manager may choose these securities based on the scheme’s investment objective and devise an investment strategy accordingly.?
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Statutory Details:?Axis Mutual Fund has been established as a Trust under the Indian Trust Act 1882, sponsored by Axis Bank Ltd. (liability restricted to ?1 Lakh).?Trustee:?Axis Mutual Fund Trustee Ltd.?Investment Manager:?Axis Asset Management Co. Ltd. (the AMC)?Risk Factors:?Axis Bank Ltd. Is not liable or responsible for any loss or shortfall resulting from the operation of the scheme.
Mutual Fund Investments are subject to market risks, read all scheme related documents carefully.