Flows into passive funds steal a March over active schemes in 2HFY21

Officials in the industry say since several large-cap funds have not been generating alpha, investors may be opting for passive funds instead

Domestic mutual fund investors are showing a tilt towards passive funds—schemes that track a benchmark index or a basket of securities or a commodity. During the past six months, passive funds have seen net flows of Rs 27,083 crore. In March, such schemes reported their fifth straight montly inflows. Actively-managed funds, on the other hand, have seen an exodus. While in March, they reported net inflows of Rs 9,115 crore, their six-month net flow tally stands at a negative Rs 36,395 crore.

Industry participants feel that this is the inflection point for passive funds and they could continue to dominate