Starting an SIP but unsure whether to go active or passive? Let’s break it down.
Active mutual funds aim to beat the market in the long term. Fund managers create an investment strategy and handpick stocks in the portfolio.
Here, the fund manager mirrors an index like the Nifty 50 and aims to match its returns (subject to tracking error.)
So, passive funds have lower expense ratios than active funds.
If you want a hands-on approach and the potential to beat the market.
You want a hands-off approach and don’t want fund manager bias influencing your portfolio.
A mix of active and passive funds can balance long-term growth potential and cost-effectiveness