ACTIVE VS PASSIVE FUNDS: WHERE TO START YOUR SIP?

INVESTING DILEMMA

Starting an SIP but unsure whether to go active or passive? Let’s break it down.

ACTIVE = EXPERT MANAGEMENT

Active mutual funds aim to beat the market in the long term. Fund managers create an investment strategy and handpick stocks in the portfolio.

PASSIVE = MIRRORING THE MARKET

Here, the fund manager mirrors an index like the Nifty 50 and aims to match its returns (subject to tracking error.)

COST-EFFECTIVENESS

So, passive funds have lower expense ratios than active funds.

GO ACTIVE IF…

If you want a hands-on approach and the potential to beat the market.

GO PASSIVE IF…

You want a hands-off approach and don’t want fund manager bias influencing your portfolio.

OR TRY BOTH

A mix of active and passive funds can balance long-term growth potential and cost-effectiveness