Passive funds dominate NFO line up as most active fund lag benchmarks

Fund houses have launched ETFs in both equity and debt segments

Every other new fund offer (NFO) launched by mutual fund (MF) houses in recent times has been in the exchange-traded fund (ETF) or index fund space. Experts say this trend is an acknowledgement of the growing popularity of passives as investment vehicles.

Fund houses have lined up passive funds both on the equities as well as on the debt side. Examples of such funds are UTI Momentum Index Fund, Edelweiss MSCI India Financials Index Fund, and two fund-of-funds by Motilal Oswal that invest in passive funds. On the debt side, the fund house has also launched the Motilal Oswal 5 Year