Active and Passive Equity Funds

According to a new study, active equity funds witnessed higher net inflows than passive equity funds in the Q2 of FY24.

Equity fund – It is a mutual fund that invests principally in stocks and thus called as stock funds which generally carry a high risk for long-term investments but can yield substantial returns over time.
These are categorized into small, mid, and large-cap based on the size of the company.

A mutual fund collects money from investors and invests the money, on their behalf, in securities (debt, equity or both).

	Active Equity Funds	Passive Equity Funds
Fund Manager’s Role in stock selection	Active	Passive
Expense ratios	Higher	Lower
Portfolio management	Driven by different strategies	Driven by benchmark index
Trading Frequency	Higher	Lesser
Capital Gains Tax	Higher	Lesser
Returns	Relatively higher	Lesser
Applicability	For investors favouring fund managers’ alpha generation potential	For investors who want to allocate exactly as per market index
Examples	ELSS (equity linked saving scheme)	Index mutual funds, Exchange-Traded Funds (ETFs)

Expense ratio is the annual maintenance charge levied by mutual funds to finance its expenses that includes annual operating costs, including management fees, allocation charges, advertising costs, etc. of the fund.

Capital gains taxes are owed on the profits from the sale of most investments if they are held for at least 1 year.

Source:

Join Our Telegram

Broadcasting Services (Regulation) Bill, 2023

Asia-Pacific Economic Cooperation (APEC)

Pradhan Mantri Suryodaya Yojana

06 Feb, 24
SHARE

Recently, Prime Minister announced Pradhan Mantri Suryodaya Yojana under which 1 crore households will get rooftop solar power systems. India’s Status of Current Solar Capacity India currently stands at 4th place globally in solar power capacity. As per Ministry of New an

Foreign Contribution Regulation Act (FCRA)- NGO

06 Feb, 24
SHARE

The Foreign Contribution Regulation Act, 2010 (FCRA) registration of two prominent non-governmental organisations (NGOs) — Centre for Policy Research (CPR) and World Vision India (WVI) have been cancelled this month. What is FCRA? Key provisions of FCRA, 2010 Key aspects Description

Voice clone-AI

06 Feb, 24
SHARE

Voice clone fraud has been on the rise in India. AI voice cloning – It is the process of creating a synthetic replica of a person’s voice through machine learning and speech synthesis technology.It is called as voice deepfakesor audio deepfakes. Objective – To achieve a high level of na

Science communication- how to promote

06 Feb, 24
SHARE

Steps taken by India to promote Science Communication Publications and Information Directorate (PID) - An organisation under Council of Science and Industrial Research (CSIR) established in 1951 for publishing and disseminating scientific information in India. National science magazines- The PI

Universal Basic Income (UBI)- Analysis

05 Feb, 24
SHARE

Universal Basic Income (UBI) can strengthen welfare architecture and unlock the nation’s latent demographic potential. UBI - It is an income support mechanism typically intended to reach all or a very large portion of the population regardless of their earnings or employment status. Objective- To provide enough to co