Was the EPFO ahead of the curve in its preference for passive funds?

Returns from active funds fail to match benchmarks

The Employees’ Provident Fund Organisation’s (EPFO’s) dependence on low-cost passive funds is starting to look smarter with each passing day, as active fund managers struggle to meet benchmark returns.

An analysis of the data from Value Research, a fund tracker, shows a majority of active funds have failed to beat their benchmarks in both the large-cap and mid-cap space. Small-cap funds are the only ones where active funds have outperformed.

The EPFO’s equity allocations have been made to passively managed funds, which seek to mimic the benchmark, instead of beating it. 

This means their returns closely match the index. This is unlike actively