{"id":77976,"date":"2026-10-26T18:45:41","date_gmt":"2026-10-26T13:15:41","guid":{"rendered":"https:\/\/www.5paisa.com\/finschool\/?post_type=markets&#038;p=77976"},"modified":"2026-10-28T16:14:30","modified_gmt":"2026-10-28T10:44:30","slug":"index-funds","status":"publish","type":"markets","link":"https:\/\/www.5paisa.com\/finschool\/course\/financial-planning-through-mutual-funds-course\/index-funds\/","title":{"rendered":"Index Funds"},"content":{"rendered":"\t\t<div data-elementor-type=\"wp-post\" data-elementor-id=\"77976\" class=\"elementor elementor-77976\">\n\t\t\t\t\t\t<section class=\"elementor-section elementor-top-section elementor-element elementor-element-4be72f6 elementor-section-full_width tab_container elementor-section-height-default elementor-section-height-default\" data-id=\"4be72f6\" data-element_type=\"section\">\n\t\t\t\t\t\t<div class=\"elementor-container elementor-column-gap-default\">\n\t\t\t\t\t<div class=\"elementor-column elementor-col-100 elementor-top-column elementor-element elementor-element-d209c0c\" data-id=\"d209c0c\" data-element_type=\"column\">\n\t\t\t<div class=\"elementor-widget-wrap elementor-element-populated\">\n\t\t\t\t\t\t<section class=\"elementor-section elementor-inner-section elementor-element elementor-element-896d102 elementor-section-full_width elementor-section-height-default elementor-section-height-default\" data-id=\"896d102\" data-element_type=\"section\">\n\t\t\t\t\t\t<div class=\"elementor-container elementor-column-gap-wide\">\n\t\t\t\t\t<div class=\"elementor-column elementor-col-50 elementor-inner-column elementor-element elementor-element-c9133f2 chapters_list\" data-id=\"c9133f2\" data-element_type=\"column\">\n\t\t\t<div class=\"elementor-widget-wrap elementor-element-populated\">\n\t\t\t\t\t\t<div class=\"elementor-element elementor-element-aa101bd elementor-widget elementor-widget-shortcode\" data-id=\"aa101bd\" data-element_type=\"widget\" data-widget_type=\"shortcode.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t<div class=\"elementor-shortcode\">\t<script>\n\t\tjQuery(document).ready(function(){\n\t\t\tjQuery(\"#post_chapters a[href*='\" + location.pathname + \"']\")\n\t\t\t\t.addClass(\"current\")\n\t\t\t\t.attr(\"aria-current\", \"page\");\n\t\t})\n\t<\/script>\n\t<div class=\"desktop_chapters\"><div id=\"post_chapters\"><div class=\"post_chapters-heading\">Chapters<\/div><ul><li><i class=\"fa fa-chevron-right\" aria-hidden=\"true\"><\/i>&nbsp;&nbsp;&nbsp;<a href=\"https:\/\/www.5paisa.com\/finschool\/course\/financial-planning-through-mutual-funds-course\/background-and-orientation\/\">Background and Orientation<\/a><\/li><li><i class=\"fa fa-chevron-right\" aria-hidden=\"true\"><\/i>&nbsp;&nbsp;&nbsp;<a href=\"https:\/\/www.5paisa.com\/finschool\/course\/financial-planning-through-mutual-funds-course\/personal-finance-math\/\">Personal Finance Math<\/a><\/li><li><i class=\"fa fa-chevron-right\" aria-hidden=\"true\"><\/i>&nbsp;&nbsp;&nbsp;<a href=\"https:\/\/www.5paisa.com\/finschool\/course\/financial-planning-through-mutual-funds-course\/money-today-vs-money-tommorrow\/\">Money Today vs Money Tommorrow<\/a><\/li><li><i class=\"fa fa-chevron-right\" aria-hidden=\"true\"><\/i>&nbsp;&nbsp;&nbsp;<a href=\"https:\/\/www.5paisa.com\/finschool\/course\/financial-planning-through-mutual-funds-course\/the-retirement-part-1\/\">The Retirement -Part 1<\/a><\/li><li><i class=\"fa fa-chevron-right\" aria-hidden=\"true\"><\/i>&nbsp;&nbsp;&nbsp;<a href=\"https:\/\/www.5paisa.com\/finschool\/course\/financial-planning-through-mutual-funds-course\/assumptions-in-retirement-planning\/\">Assumptions in Retirement Planning<\/a><\/li><li><i class=\"fa fa-chevron-right\" aria-hidden=\"true\"><\/i>&nbsp;&nbsp;&nbsp;<a href=\"https:\/\/www.5paisa.com\/finschool\/course\/financial-planning-through-mutual-funds-course\/understanding-stock-funds\/\">The Role of Mutual Funds in Modern Finance<\/a><\/li><li><i class=\"fa fa-chevron-right\" aria-hidden=\"true\"><\/i>&nbsp;&nbsp;&nbsp;<a href=\"https:\/\/www.5paisa.com\/finschool\/course\/financial-planning-through-mutual-funds-course\/concept-of-fund-and-nav\/\">Concept of Fund and NAV<\/a><\/li><li><i class=\"fa fa-chevron-right\" aria-hidden=\"true\"><\/i>&nbsp;&nbsp;&nbsp;<a href=\"https:\/\/www.5paisa.com\/finschool\/course\/financial-planning-through-mutual-funds-course\/understanding-the-performance-of-your-fund\/\">Mutual Fund Factsheet<\/a><\/li><li><i class=\"fa fa-chevron-right\" aria-hidden=\"true\"><\/i>&nbsp;&nbsp;&nbsp;<a href=\"https:\/\/www.5paisa.com\/finschool\/course\/financial-planning-through-mutual-funds-course\/the-equity-scheme\/\"> The Equity Scheme<\/a><\/li><li><i class=\"fa fa-chevron-right\" aria-hidden=\"true\"><\/i>&nbsp;&nbsp;&nbsp;<a href=\"https:\/\/www.5paisa.com\/finschool\/course\/financial-planning-through-mutual-funds-course\/equity-scheme-part-2\/\">Equity Scheme Part 2<\/a><\/li><li><i class=\"fa fa-chevron-right\" aria-hidden=\"true\"><\/i>&nbsp;&nbsp;&nbsp;<a href=\"https:\/\/www.5paisa.com\/finschool\/course\/financial-planning-through-mutual-funds-course\/debt-funds-part-1\/\">Debt Funds Part 1<\/a><\/li><li><i class=\"fa fa-chevron-right\" aria-hidden=\"true\"><\/i>&nbsp;&nbsp;&nbsp;<a href=\"https:\/\/www.5paisa.com\/finschool\/course\/financial-planning-through-mutual-funds-course\/monitoring-your-portfolio\/\">Debt Funds Part 2<\/a><\/li><li><i class=\"fa fa-chevron-right\" aria-hidden=\"true\"><\/i>&nbsp;&nbsp;&nbsp;<a href=\"https:\/\/www.5paisa.com\/finschool\/course\/financial-planning-through-mutual-funds-course\/debt-funds-part-3\/\">Debt Funds Part 3<\/a><\/li><li><i class=\"fa fa-chevron-right\" aria-hidden=\"true\"><\/i>&nbsp;&nbsp;&nbsp;<a href=\"https:\/\/www.5paisa.com\/finschool\/course\/financial-planning-through-mutual-funds-course\/debt-funds-part-4\/\">Debt Funds Part 4<\/a><\/li><li><i class=\"fa fa-chevron-right\" aria-hidden=\"true\"><\/i>&nbsp;&nbsp;&nbsp;<a href=\"https:\/\/www.5paisa.com\/finschool\/course\/financial-planning-through-mutual-funds-course\/investing-in-bonds\/\">Investing in Bonds<\/a><\/li><li><i class=\"fa fa-chevron-right\" aria-hidden=\"true\"><\/i>&nbsp;&nbsp;&nbsp;<a href=\"https:\/\/www.5paisa.com\/finschool\/course\/financial-planning-through-mutual-funds-course\/index-funds\/\">Index Funds<\/a><\/li><li><i class=\"fa fa-chevron-right\" aria-hidden=\"true\"><\/i>&nbsp;&nbsp;&nbsp;<a href=\"https:\/\/www.5paisa.com\/finschool\/course\/financial-planning-through-mutual-funds-course\/arbitrage-funds\/\">Arbitrage Funds<\/a><\/li><li><i class=\"fa fa-chevron-right\" aria-hidden=\"true\"><\/i>&nbsp;&nbsp;&nbsp;<a href=\"https:\/\/www.5paisa.com\/finschool\/course\/financial-planning-through-mutual-funds-course\/measuring-mutual-fund-returns\/\">Measuring Mutual Fund Returns<\/a><\/li><li><i class=\"fa fa-chevron-right\" aria-hidden=\"true\"><\/i>&nbsp;&nbsp;&nbsp;<a href=\"https:\/\/www.5paisa.com\/finschool\/course\/financial-planning-through-mutual-funds-course\/rolling-returns\/\">Rolling Returns<\/a><\/li><li><i class=\"fa fa-chevron-right\" aria-hidden=\"true\"><\/i>&nbsp;&nbsp;&nbsp;<a href=\"https:\/\/www.5paisa.com\/finschool\/course\/financial-planning-through-mutual-funds-course\/mutual-fund-expense-ratio\/\">Mutual Fund Expense Ratio<\/a><\/li><li><i class=\"fa fa-chevron-right\" aria-hidden=\"true\"><\/i>&nbsp;&nbsp;&nbsp;<a href=\"https:\/\/www.5paisa.com\/finschool\/course\/financial-planning-through-mutual-funds-course\/mutual-fund-benchmarking\/\">Mutual Fund Benchmarking<\/a><\/li><li><i class=\"fa fa-chevron-right\" aria-hidden=\"true\"><\/i>&nbsp;&nbsp;&nbsp;<a href=\"https:\/\/www.5paisa.com\/finschool\/course\/financial-planning-through-mutual-funds-course\/mutual-fund-beta-sd-and-sharpe-ratio\/\">Mutual Fund Beta SD and Sharpe Ratio<\/a><\/li><li><i class=\"fa fa-chevron-right\" aria-hidden=\"true\"><\/i>&nbsp;&nbsp;&nbsp;<a href=\"https:\/\/www.5paisa.com\/finschool\/course\/financial-planning-through-mutual-funds-course\/sortino-and-capture-ratios\/\">Sortino and Capture Ratios<\/a><\/li><li><i class=\"fa fa-chevron-right\" aria-hidden=\"true\"><\/i>&nbsp;&nbsp;&nbsp;<a href=\"https:\/\/www.5paisa.com\/finschool\/course\/financial-planning-through-mutual-funds-course\/how-to-analyse-equity-mutual-funds\/\">How to Analyse Equity Mutual Funds<\/a><\/li><li><i class=\"fa fa-chevron-right\" aria-hidden=\"true\"><\/i>&nbsp;&nbsp;&nbsp;<a href=\"https:\/\/www.5paisa.com\/finschool\/course\/financial-planning-through-mutual-funds-course\/how-to-analyse-debt-mutual-fund\/\">How to Analyse Debt Mutual Fund<\/a><\/li><li><i class=\"fa fa-chevron-right\" aria-hidden=\"true\"><\/i>&nbsp;&nbsp;&nbsp;<a href=\"https:\/\/www.5paisa.com\/finschool\/course\/financial-planning-through-mutual-funds-course\/mutual-fund-portfolio\/\">Mutual Fund Portfolio<\/a><\/li><li><i class=\"fa fa-chevron-right\" aria-hidden=\"true\"><\/i>&nbsp;&nbsp;&nbsp;<a href=\"https:\/\/www.5paisa.com\/finschool\/course\/financial-planning-through-mutual-funds-course\/smart-beta-funds\/\">Smart Beta Funds<\/a><\/li><li><i class=\"fa fa-chevron-right\" aria-hidden=\"true\"><\/i>&nbsp;&nbsp;&nbsp;<a href=\"https:\/\/www.5paisa.com\/finschool\/course\/financial-planning-through-mutual-funds-course\/asset-allocation\/\">Asset Allocation<\/a><\/li><li><i class=\"fa fa-chevron-right\" aria-hidden=\"true\"><\/i>&nbsp;&nbsp;&nbsp;<a href=\"https:\/\/www.5paisa.com\/finschool\/course\/financial-planning-through-mutual-funds-course\/exchange-traded-funds\/\">Exchange Traded Funds<\/a><\/li><li><i class=\"fa fa-chevron-right\" aria-hidden=\"true\"><\/i>&nbsp;&nbsp;&nbsp;<a href=\"https:\/\/www.5paisa.com\/finschool\/course\/financial-planning-through-mutual-funds-course\/basics-of-macro-economics\/\">Basics of Macro Economics<\/a><\/li><li><i class=\"fa fa-chevron-right\" aria-hidden=\"true\"><\/i>&nbsp;&nbsp;&nbsp;<a href=\"https:\/\/www.5paisa.com\/finschool\/course\/financial-planning-through-mutual-funds-course\/personal-finance-part-1\/\">Personal Finance-Part 1<\/a><\/li><li><i class=\"fa fa-chevron-right\" aria-hidden=\"true\"><\/i>&nbsp;&nbsp;&nbsp;<a href=\"https:\/\/www.5paisa.com\/finschool\/course\/financial-planning-through-mutual-funds-course\/personal-finance-review-part-2\/\">Personal Finance Review Part 2 <\/a><\/li><li><i class=\"fa fa-chevron-right\" aria-hidden=\"true\"><\/i>&nbsp;&nbsp;&nbsp;<a href=\"https:\/\/www.5paisa.com\/finschool\/course\/financial-planning-through-mutual-funds-course\/know-your-funds\/\">Know Your Funds<\/a><\/li><\/ul><\/div><\/div><div class=\"chapters_toggle\"><a href=\"#\" id=\"open_chapters\" aria-label=\"View chapters\"><span>View Chapters<\/span>&nbsp;&nbsp;&nbsp;<i class=\"fa fa-chevron-right\" aria-hidden=\"true\"><\/i><\/a><a href=\"#\" id=\"close_chapters\" style=\"display:none;\" 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    <span class=\"eael-tab-title title-after-icon\" >Slides<\/span>                            \n                                                    <\/li>\n                                            <li id=\"videos\" class=\" eael-tab-item-trigger eael-tab-nav-item\" aria-selected=\"false\" data-tab=\"3\" role=\"tab\" tabindex=\"-1\" aria-controls=\"videos-tab\" aria-expanded=\"false\">\n                            \n                                                                <i class=\"far fa-eye\"><\/i>                                                            \n                                                            <span class=\"eael-tab-title title-after-icon\" >Videos<\/span>                            \n                                                    <\/li>\n                    \n                                  <\/ul>\n            <\/div>\n            \n            <div class=\"eael-tabs-content\">\n\t\t        \n                    <div id=\"study-tab\" class=\"clearfix eael-tab-content-item active-default\" data-title-link=\"study-tab\">\n\t\t\t\t        <p><div class='white' style='background:rgb(255, 255, 255); border:solid 0px rgb(255, 255, 255); border-radius:0px; padding:0px 0px 0px 1px;'>\n<div id='text_slider' class='owl-carousel sa_owl_theme owl-pagination-true' data-slider-id='text_slider' style='visibility: visible;visibility:visible;'>\n<div id='text_slider_slide01' class='sa_hover_container' data-hash='Deep-Dive-into-Active-vs-Passive-Mutual-Funds' style='padding:4.9% 5%; margin:0px 0%; background-color:rgb(255, 255, 255); min-height:405px; '><h2 style=\"text-align: left\"><strong>16.1 <\/strong><strong><b>Deep Dive into Active vs Passive Mutual Funds<\/b><\/strong><\/h2>\r\n<p><img fetchpriority=\"high\" decoding=\"async\" class=\"aligncenter wp-image-77968 size-full\" src=\"https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2026\/10\/Active-vs-Passive-Funds-1.png\" alt=\"Active vs Passive Funds\" width=\"1080\" height=\"1080\" srcset=\"https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2026\/10\/Active-vs-Passive-Funds-1.png 1080w, https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2026\/10\/Active-vs-Passive-Funds-1-300x300.png 300w, https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2026\/10\/Active-vs-Passive-Funds-1-1024x1024.png 1024w, https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2026\/10\/Active-vs-Passive-Funds-1-150x150.png 150w, https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2026\/10\/Active-vs-Passive-Funds-1-768x768.png 768w, https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2026\/10\/Active-vs-Passive-Funds-1-50x50.png 50w, https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2026\/10\/Active-vs-Passive-Funds-1-100x100.png 100w, https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2026\/10\/Active-vs-Passive-Funds-1-96x96.png 96w\" sizes=\"(max-width: 1080px) 100vw, 1080px\" \/><\/p>\r\n<p>&nbsp;<\/p>\r\n<p>When we talk about mutual funds, the distinction between active and passive management is one of the most fundamental concepts in investing. Understanding this difference is crucial because it directly impacts the risk you take, the costs you incur, and the returns you can expect. Let\u2019s explore both approaches in depth, with real-world examples, structured comparisons, and analytical insights.<\/p>\r\n<p><strong><b>Active Mutual Funds \u2013 The Pursuit of Alpha<\/b><\/strong><\/p>\r\n<p>An active mutual fund is essentially a fund where the manager is not content with simply matching the market. Instead, the goal is to beat the benchmark. The benchmark could be an index like the Nifty 50, S&amp;P 500, or MSCI Emerging Markets Index, depending on the fund\u2019s category. The excess return generated over the benchmark is called alpha.<\/p>\r\n<p>Active managers employ a wide range of strategies. Some focus on value investing, identifying companies trading below their intrinsic worth. For instance, during the 2008 financial crisis, many banks were trading at a fraction of their book value. A value-oriented manager who picked strong banks at that time would have generated significant alpha once the sector recovered. On the other hand, growth investing\u00a0looks at companies reinvesting profits to expand rapidly. Think of Amazon in the early 2000s\u2014despite low profits, its reinvestment strategy fueled exponential growth, rewarding investors who believed in its long-term trajectory.<\/p>\r\n<p>Active funds also use sector rotation, momentum strategies, contrarian bets, and even macroeconomic forecasting. For example, a manager anticipating rising interest rates might overweight financials and underweight real estate. The skill lies in making informed deviations from the benchmark to capture opportunities.<\/p>\r\n<p>However, active management comes with higher costs\u00a0(expense ratios, research, trading fees) and higher risks. Not every manager succeeds in generating alpha consistently. In fact, studies show that over long horizons, a majority of active funds underperform their benchmarks after costs. This makes the choice of fund manager critical.<\/p>\r\n<p><strong>Passive Mutual Funds \u2013 The Simplicity of Index Tracking<\/strong><\/p>\r\n<p>A passive fund, often called an <strong>index fund,<\/strong> takes a very different approach. Instead of trying to beat the market, it simply aims to mirror the benchmark. If you invest in a Nifty 50 index fund, the portfolio will hold the same 50 companies in the same proportion as the index. The objective is not to outperform but to replicate.<\/p>\r\n<p>The advantage here is low cost. Since there\u2019s no need for expensive research teams or frequent trading, expense ratios are minimal. For example, while an active equity fund in India may charge around 1.5\u20132% in its regular plan (roughly 0.5\u20131% in its direct plan), the direct plan of a Nifty 50 index fund may charge as little as 0.1\u20130.2%. Over decades, this cost difference compounds significantly.<\/p>\r\n<p>Passive funds also provide transparency\u00a0and predictability. You know exactly what you\u2019re investing in\u2014the index constituents. If the Nifty 50 delivers 12% in a year, your fund will deliver close to 12%, minus costs and a small tracking error. There\u2019s no uncertainty about whether the manager\u2019s strategy will succeed or fail.<\/p>\r\n<p>The downside is that you will never beat the market. Your return will almost always trail the index slightly because of costs and tracking error. But for many investors, especially those who believe markets are efficient, this trade-off is acceptable. In fact, legendary investor Warren Buffett has often recommended low\u2011cost index funds for most individuals, arguing that they outperform the majority of active managers over time.<\/p>\r\n<p><strong><b>Comparative Analysis<\/b><\/strong><\/p>\r\n<table>\r\n<tbody>\r\n<tr>\r\n<td>\r\n<p><strong><b>Aspect<\/b><\/strong><\/p>\r\n<\/td>\r\n<td>\r\n<p><strong><b>Active Funds<\/b><\/strong><\/p>\r\n<\/td>\r\n<td>\r\n<p><strong><b>Passive Funds<\/b><\/strong><\/p>\r\n<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>\r\n<p><strong><b>Objective<\/b><\/strong><\/p>\r\n<\/td>\r\n<td>\r\n<p>Beat the benchmark (generate alpha)<\/p>\r\n<\/td>\r\n<td>\r\n<p>Replicate benchmark returns<\/p>\r\n<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>\r\n<p><strong><b>Costs<\/b><\/strong><\/p>\r\n<\/td>\r\n<td>\r\n<p>Higher (\u22480.5\u20132.1% base expense ratio, depending on plan and fund size)<\/p>\r\n<\/td>\r\n<td>\r\n<p>Low (\u22480.1\u20130.5% expense ratio)<\/p>\r\n<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>\r\n<p><strong><b>Risk<\/b><\/strong><\/p>\r\n<\/td>\r\n<td>\r\n<p>Higher (depends on manager skill)<\/p>\r\n<\/td>\r\n<td>\r\n<p>Market risk only (no fund\u2011manager selection risk)<\/p>\r\n<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>\r\n<p><strong><b>Transparency<\/b><\/strong><\/p>\r\n<\/td>\r\n<td>\r\n<p>Moderate (depends on strategy disclosure)<\/p>\r\n<\/td>\r\n<td>\r\n<p>High (index constituents are public)<\/p>\r\n<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>\r\n<p><strong><b>Performance<\/b><\/strong><\/p>\r\n<\/td>\r\n<td>\r\n<p>Can outperform or underperform<\/p>\r\n<\/td>\r\n<td>\r\n<p>Usually slightly below benchmark (tracking difference)<\/p>\r\n<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>\r\n<p><strong><b>Example<\/b><\/strong><\/p>\r\n<\/td>\r\n<td>\r\n<p>Value fund picking undervalued banks<\/p>\r\n<\/td>\r\n<td>\r\n<p>Nifty 50 index fund<\/p>\r\n<\/td>\r\n<\/tr>\r\n<\/tbody>\r\n<\/table>\r\n<p>&nbsp;<\/p>\r\n<p>&nbsp;<\/p>\r\n<p>&nbsp;<\/p>\r\n<p>&nbsp;<\/p>\r\n<p>&nbsp;<\/p>\r\n<p>&nbsp;<\/p>\r\n<p>&nbsp;<\/p>\r\n<p>&nbsp;<\/p>\r\n<p>&nbsp;<\/p><\/div>\n<div id='text_slider_slide02' class='sa_hover_container' data-hash='The-Evolution-of-Mutual-Funds' style='padding:4.9% 5%; margin:0px 0%; background-color:rgb(255, 255, 255); min-height:405px; '><h2><strong><b>16.2 <\/b><\/strong><strong><b>The Evolution of Mutual Funds<\/b><\/strong><\/h2>\r\n<p><img decoding=\"async\" class=\"aligncenter wp-image-77969 size-full\" src=\"https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2026\/10\/The-Evolution-of-Mutual-Funds.png\" alt=\"The Evolution of Mutual Funds\" width=\"1080\" height=\"1080\" srcset=\"https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2026\/10\/The-Evolution-of-Mutual-Funds.png 1080w, https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2026\/10\/The-Evolution-of-Mutual-Funds-300x300.png 300w, https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2026\/10\/The-Evolution-of-Mutual-Funds-1024x1024.png 1024w, https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2026\/10\/The-Evolution-of-Mutual-Funds-150x150.png 150w, https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2026\/10\/The-Evolution-of-Mutual-Funds-768x768.png 768w, https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2026\/10\/The-Evolution-of-Mutual-Funds-50x50.png 50w, https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2026\/10\/The-Evolution-of-Mutual-Funds-100x100.png 100w, https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2026\/10\/The-Evolution-of-Mutual-Funds-96x96.png 96w\" sizes=\"(max-width: 1080px) 100vw, 1080px\" \/><\/p>\r\n<p>Mutual funds have a fascinating history that reflects the evolution of financial markets. The earliest pooled investment vehicles appeared in 18th century Europe, particularly in the Netherlands, where merchants created diversified trusts to spread risk across multiple ventures. By the late 19th century, similar structures emerged in the UK and the US, offering ordinary investors access to professional management.<\/p>\r\n<p>The modern mutual fund industry took off in the 1920s in America, with the Massachusetts Investors Trust (1924) often cited as the first open-ended mutual fund. The concept of \u201copenended\u201d meant investors could buy or redeem units at net asset value (NAV) anytime, unlike closedended funds that traded like stocks. Over decades, regulatory frameworks such as the US Investment Company Act of 1940 and India\u2019s SEBI (Mutual Funds) Regulations of 1993 and 1996 (now replaced by the SEBI (Mutual Funds) Regulations, 2026) shaped investor protection and transparency.<\/p>\r\n<p>Today, mutual funds form a multi-trillion dollar industry globally, offering everything from equity and debt funds to hybrids, ETFs, and thematic strategies. Their evolution mirrors broader economic changes: globalization, technology, and democratization of finance.<\/p>\r\n<p><strong><b>Table: Key Milestones in Mutual Fund History<\/b><\/strong><\/p>\r\n<table>\r\n<tbody>\r\n<tr>\r\n<td>\r\n<p><strong><b>Year<\/b><\/strong><\/p>\r\n<\/td>\r\n<td>\r\n<p><strong><b>Country<\/b><\/strong><\/p>\r\n<\/td>\r\n<td>\r\n<p><strong><b>Event<\/b><\/strong><\/p>\r\n<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>\r\n<p><strong><b>1774<\/b><\/strong><\/p>\r\n<\/td>\r\n<td>\r\n<p>Netherlands<\/p>\r\n<\/td>\r\n<td>\r\n<p>First pooled investment trust<\/p>\r\n<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>\r\n<p><strong><b>1924<\/b><\/strong><\/p>\r\n<\/td>\r\n<td>\r\n<p>USA<\/p>\r\n<\/td>\r\n<td>\r\n<p>Massachusetts Investors Trust launched<\/p>\r\n<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>\r\n<p><strong><b>1940<\/b><\/strong><\/p>\r\n<\/td>\r\n<td>\r\n<p>USA<\/p>\r\n<\/td>\r\n<td>\r\n<p>Investment Company Act established<\/p>\r\n<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>\r\n<p><strong><b>1963<\/b><\/strong><\/p>\r\n<\/td>\r\n<td>\r\n<p>India<\/p>\r\n<\/td>\r\n<td>\r\n<p>Unit Trust of India founded<\/p>\r\n<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>\r\n<p><strong><b>1993<\/b><\/strong><\/p>\r\n<\/td>\r\n<td>\r\n<p>India<\/p>\r\n<\/td>\r\n<td>\r\n<p>SEBI (Mutual Funds) Regulations introduced; private AMCs allowed<\/p>\r\n<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>\r\n<p><strong><b>2000s<\/b><\/strong><\/p>\r\n<\/td>\r\n<td>\r\n<p>Global<\/p>\r\n<\/td>\r\n<td>\r\n<p>Rise of ETFs and passive investing<\/p>\r\n<\/td>\r\n<\/tr>\r\n<\/tbody>\r\n<\/table>\r\n<p>&nbsp;<\/p>\r\n<p>&nbsp;<\/p>\r\n<p>&nbsp;<\/p>\r\n<p>&nbsp;<\/p>\r\n<p>&nbsp;<\/p>\r\n<p>&nbsp;<\/p>\r\n<p>&nbsp;<\/p>\r\n<p>&nbsp;<\/p><\/div>\n<div id='text_slider_slide03' class='sa_hover_container' data-hash='Growth-of-the-Industry-in-India' style='padding:4.9% 5%; margin:0px 0%; background-color:rgb(255, 255, 255); min-height:405px; '><h2 style=\"text-align: left\"><strong>16.3<\/strong><strong><b>\u00a0Growth of the Industry in India<\/b><\/strong><\/h2>\r\n<p><img decoding=\"async\" class=\"aligncenter wp-image-77970 size-full\" src=\"https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2026\/10\/Growth-of-the-Industry-in-India.png\" alt=\"Growth of the Industry in India\" width=\"1080\" height=\"1080\" srcset=\"https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2026\/10\/Growth-of-the-Industry-in-India.png 1080w, https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2026\/10\/Growth-of-the-Industry-in-India-300x300.png 300w, https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2026\/10\/Growth-of-the-Industry-in-India-1024x1024.png 1024w, https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2026\/10\/Growth-of-the-Industry-in-India-150x150.png 150w, https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2026\/10\/Growth-of-the-Industry-in-India-768x768.png 768w, https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2026\/10\/Growth-of-the-Industry-in-India-50x50.png 50w, https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2026\/10\/Growth-of-the-Industry-in-India-100x100.png 100w, https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2026\/10\/Growth-of-the-Industry-in-India-96x96.png 96w\" sizes=\"(max-width: 1080px) 100vw, 1080px\" \/><\/p>\r\n<p>India\u2019s mutual fund journey began with the Unit Trust of India (UTI)\u00a0in 1963, which dominated the market for decades. Public sector banks and insurers were allowed to launch mutual funds from 1987 (SBI Mutual Fund was the first non\u2011UTI fund), and liberalization in 1993 opened the sector to private players, both domestic and foreign. By the 2000s, firms like HDFC, ICICI Prudential, and SBI Mutual Fund became household names.<\/p>\r\n<p>The industry\u2019s growth was fueled by rising middle\u2011class incomes, awareness campaigns, and tax incentives for Equity Linked Savings Schemes (ELSS), earlier under Section 80C of the Income\u2011tax Act, 1961 and, from 1 April 2026, under Section 123 of the Income\u2011tax Act, 2025 (the deduction is available only to those who opt for the old tax regime). The introduction of Systematic Investment Plans (SIPs) revolutionized retail participation, allowing investors to contribute small amounts monthly.<\/p>\r\n<p>As of September 2026, India\u2019s mutual fund industry assets under management (AUM) stood at about \u20b982.6 lakh crore (\u20b982.6 trillion), with monthly SIP inflows at a record of about \u20b932,490 crore. Equity funds, debt funds, and hybrid funds cater to diverse needs. Technology has further accelerated adoption, with mobile apps and digital KYC making investing seamless.<\/p>\r\n<p>&nbsp;<\/p>\r\n<p>&nbsp;<\/p>\r\n<p>&nbsp;<\/p>\r\n<p>&nbsp;<\/p>\r\n<p>&nbsp;<\/p>\r\n<p>&nbsp;<\/p><\/div>\n<div id='text_slider_slide04' class='sa_hover_container' data-hash='Regulatory-Framework' style='padding:4.9% 5%; margin:0px 0%; background-color:rgb(255, 255, 255); min-height:405px; '><h2 style=\"text-align: left\"><strong>16.4. <\/strong><strong><b>Regulatory Framework<\/b><\/strong><\/h2>\r\n<p><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter wp-image-77971 size-full\" src=\"https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2026\/10\/Regulatory-Framework.png\" alt=\"Regulatory Framework\" width=\"1080\" height=\"1080\" srcset=\"https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2026\/10\/Regulatory-Framework.png 1080w, https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2026\/10\/Regulatory-Framework-300x300.png 300w, https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2026\/10\/Regulatory-Framework-1024x1024.png 1024w, https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2026\/10\/Regulatory-Framework-150x150.png 150w, https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2026\/10\/Regulatory-Framework-768x768.png 768w, https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2026\/10\/Regulatory-Framework-50x50.png 50w, https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2026\/10\/Regulatory-Framework-100x100.png 100w, https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2026\/10\/Regulatory-Framework-96x96.png 96w\" sizes=\"(max-width: 1080px) 100vw, 1080px\" \/><\/p>\r\n<p>Mutual funds operate under strict regulation to protect investors. In India, the Securities and Exchange Board of India (SEBI)\u00a0sets rules on disclosures, risk management, and fund categorization. Globally, similar bodies exist: the SEC in the US, FCA in the UK.<\/p>\r\n<p>Key regulations include:<\/p>\r\n<ul>\r\n<li><b><\/b><strong><b>Transparency: <\/b><\/strong>Funds must disclose portfolio holdings regularly.<\/li>\r\n<li><b><\/b><strong><b>Categorization: <\/b><\/strong>Equity, debt, hybrid, life cycle and other schemes (index funds, ETFs, fund of funds) are clearly defined. SEBI\u2019s 2017 categorisation framework was revised in February 2026: the solution\u2011oriented category (retirement and children\u2019s funds) was discontinued, Life Cycle Funds were added, sectoral and thematic funds became separate scheme types, and index funds and ETFs must keep at least 95% of their assets in the securities of the index they track.<\/li>\r\n<li><b><\/b><strong><b>Expense Ratio Caps:\u00a0 <\/b><\/strong>SEBI limits how much AMCs can charge. From 1 April 2026, the cap applies to a \u2018base expense ratio\u2019, with statutory levies such as GST and STT disclosed separately.<\/li>\r\n<li><b><\/b><strong><b>Investor Protection: <\/b><\/strong>Rules on mis-selling, advertising, and grievance redressal.<\/li>\r\n<\/ul>\r\n<p><strong><b>Table: Regulatory Comparison<\/b><\/strong><\/p>\r\n<table>\r\n<tbody>\r\n<tr>\r\n<td>\r\n<p><strong><b>Aspect<\/b><\/strong><\/p>\r\n<\/td>\r\n<td>\r\n<p><strong><b>India (SEBI)<\/b><\/strong><\/p>\r\n<\/td>\r\n<td>\r\n<p><strong><b>USA (SEC)<\/b><\/strong><\/p>\r\n<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>\r\n<p><strong><b>Expense Ratio Cap<\/b><\/strong><\/p>\r\n<\/td>\r\n<td>\r\n<p>Yes<\/p>\r\n<\/td>\r\n<td>\r\n<p>No strict cap<\/p>\r\n<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>\r\n<p><strong><b>Portfolio Disclosure<\/b><\/strong><\/p>\r\n<\/td>\r\n<td>\r\n<p>Monthly (fortnightly for debt schemes)<\/p>\r\n<\/td>\r\n<td>\r\n<p>Quarterly<\/p>\r\n<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>\r\n<p><strong><b>Fund Categorization<\/b><\/strong><\/p>\r\n<\/td>\r\n<td>\r\n<p>Standardized<\/p>\r\n<\/td>\r\n<td>\r\n<p>Flexible<\/p>\r\n<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>\r\n<p><strong><b>Investor Grievance<\/b><\/strong><\/p>\r\n<\/td>\r\n<td>\r\n<p>SCORES and SMART ODR platforms<\/p>\r\n<\/td>\r\n<td>\r\n<p>SEC complaint system<\/p>\r\n<\/td>\r\n<\/tr>\r\n<\/tbody>\r\n<\/table>\r\n<p><strong><b>\u00a0<\/b><\/strong><\/p>\r\n<p>&nbsp;<\/p>\r\n<p>&nbsp;<\/p>\r\n<p>&nbsp;<\/p>\r\n<p>&nbsp;<\/p>\r\n<p>&nbsp;<\/p><\/div>\n<div id='text_slider_slide05' class='sa_hover_container' data-hash='Types-of-Mutual-Funds' style='padding:4.9% 5%; margin:0px 0%; background-color:rgb(255, 255, 255); min-height:405px; '><h2 style=\"text-align: left\">16.5 <strong><b>Types of Mutual Funds<\/b><\/strong><\/h2>\r\n<p><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter wp-image-77972 size-full\" src=\"https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2026\/10\/Types-of-Mutual-Funds.png\" alt=\"Types of Mutual Funds\" width=\"1080\" height=\"1080\" srcset=\"https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2026\/10\/Types-of-Mutual-Funds.png 1080w, https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2026\/10\/Types-of-Mutual-Funds-300x300.png 300w, https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2026\/10\/Types-of-Mutual-Funds-1024x1024.png 1024w, https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2026\/10\/Types-of-Mutual-Funds-150x150.png 150w, https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2026\/10\/Types-of-Mutual-Funds-768x768.png 768w, https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2026\/10\/Types-of-Mutual-Funds-50x50.png 50w, https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2026\/10\/Types-of-Mutual-Funds-100x100.png 100w, https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2026\/10\/Types-of-Mutual-Funds-96x96.png 96w\" sizes=\"(max-width: 1080px) 100vw, 1080px\" \/><\/p>\r\n<p>Mutual funds can be classified in multiple ways:<\/p>\r\n<ul>\r\n<li><b><\/b><strong><b>Equity Funds: <\/b><\/strong>Invest in stocks; high risk, higher return potential.<\/li>\r\n<li><b><\/b><strong><b>Debt Funds: <\/b><\/strong>Invest in bonds; lower risk, steady income.<\/li>\r\n<li><b><\/b><strong><b>Hybrid Funds: <\/b><\/strong>Mix of equity and debt.<\/li>\r\n<li><b><\/b><strong><b>Index Funds\/ETFs: <\/b><\/strong>Passive funds tracking benchmarks.<\/li>\r\n<li><b><\/b><strong><b>Sector\/Thematic Funds: <\/b><\/strong>Focused on industries like IT, pharma, or ESG.<\/li>\r\n<\/ul>\r\n<p><strong><b>Table: Fund Types and Risk Profiles<\/b><\/strong><\/p>\r\n<table>\r\n<tbody>\r\n<tr>\r\n<td>\r\n<p><strong><b>Fund Type<\/b><\/strong><\/p>\r\n<\/td>\r\n<td>\r\n<p><strong><b>Example<\/b><\/strong><\/p>\r\n<\/td>\r\n<td>\r\n<p><strong><b>Risk<\/b><\/strong><\/p>\r\n<\/td>\r\n<td>\r\n<p><strong><b>Return Potential<\/b><\/strong><\/p>\r\n<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>\r\n<p><strong><b>Equity<\/b><\/strong><\/p>\r\n<\/td>\r\n<td>\r\n<p>Large Cap Fund<\/p>\r\n<\/td>\r\n<td>\r\n<p>High<\/p>\r\n<\/td>\r\n<td>\r\n<p>High<\/p>\r\n<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>\r\n<p><strong><b>Debt<\/b><\/strong><\/p>\r\n<\/td>\r\n<td>\r\n<p>Liquid Fund<\/p>\r\n<\/td>\r\n<td>\r\n<p>Low<\/p>\r\n<\/td>\r\n<td>\r\n<p>Low<\/p>\r\n<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>\r\n<p><strong><b>Hybrid<\/b><\/strong><\/p>\r\n<\/td>\r\n<td>\r\n<p>Balanced Advantage<\/p>\r\n<\/td>\r\n<td>\r\n<p>Moderate<\/p>\r\n<\/td>\r\n<td>\r\n<p>Moderate<\/p>\r\n<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>\r\n<p><strong><b>Index<\/b><\/strong><\/p>\r\n<\/td>\r\n<td>\r\n<p>Nifty 50 Index Fund<\/p>\r\n<\/td>\r\n<td>\r\n<p>Market Risk<\/p>\r\n<\/td>\r\n<td>\r\n<p>Benchmark Returns<\/p>\r\n<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>\r\n<p><strong><b>Sector<\/b><\/strong><\/p>\r\n<\/td>\r\n<td>\r\n<p>Pharma Fund<\/p>\r\n<\/td>\r\n<td>\r\n<p>Concentrated Risk<\/p>\r\n<\/td>\r\n<td>\r\n<p>Variable<\/p>\r\n<\/td>\r\n<\/tr>\r\n<\/tbody>\r\n<\/table>\r\n<p>&nbsp;<\/p>\r\n<p>&nbsp;<\/p>\r\n<p>&nbsp;<\/p>\r\n<p>&nbsp;<\/p>\r\n<p>&nbsp;<\/p>\r\n<p>&nbsp;<\/p>\r\n<p>&nbsp;<\/p><\/div>\n<div id='text_slider_slide06' class='sa_hover_container' data-hash='Role-of-Fund-Managers' style='padding:4.9% 5%; margin:0px 0%; background-color:rgb(255, 255, 255); min-height:405px; '><h2 style=\"text-align: left\"><strong>16.6 <\/strong><strong><b>Role of Fund Managers<\/b><\/strong><\/h2>\r\n<p><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter wp-image-77973 size-full\" src=\"https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2026\/10\/Role-of-Fund-Managers.png\" alt=\"Role of Fund Managers\" width=\"1080\" height=\"1080\" srcset=\"https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2026\/10\/Role-of-Fund-Managers.png 1080w, https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2026\/10\/Role-of-Fund-Managers-300x300.png 300w, https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2026\/10\/Role-of-Fund-Managers-1024x1024.png 1024w, https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2026\/10\/Role-of-Fund-Managers-150x150.png 150w, https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2026\/10\/Role-of-Fund-Managers-768x768.png 768w, https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2026\/10\/Role-of-Fund-Managers-50x50.png 50w, https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2026\/10\/Role-of-Fund-Managers-100x100.png 100w, https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2026\/10\/Role-of-Fund-Managers-96x96.png 96w\" sizes=\"(max-width: 1080px) 100vw, 1080px\" \/><\/p>\r\n<p>Fund managers are the architects of active funds. Their role includes:<\/p>\r\n<ul>\r\n<li><b><\/b><strong><b>Stock Selection: <\/b><\/strong>Identifying undervalued or high-growth companies.<\/li>\r\n<li><b><\/b><strong><b>Asset Allocation: <\/b><\/strong>Balancing equity, debt, and cash.<\/li>\r\n<li><b><\/b><strong><b>Risk Management: <\/b><\/strong>Hedging against market downturns.<\/li>\r\n<li><b><\/b><strong><b>Performance Monitoring: <\/b><\/strong>Ensuring returns align with objectives.<\/li>\r\n<\/ul>\r\n<p>For example, a manager running a value fund may overweight PSU banks during a recovery phase, while a growth manager may focus on fast\u2011growing technology companies. Their decisions directly impact alpha generation.<\/p>\r\n<p>&nbsp;<\/p>\r\n<p>&nbsp;<\/p>\r\n<p>&nbsp;<\/p>\r\n<p>&nbsp;<\/p>\r\n<p>&nbsp;<\/p><\/div>\n<div id='text_slider_slide07' class='sa_hover_container' data-hash='Costs-and-Expense-Ratios' style='padding:4.9% 5%; margin:0px 0%; background-color:rgb(255, 255, 255); min-height:405px; '><h2 style=\"text-align: left\"><strong>16.7 <\/strong><strong><b>Costs and Expense Ratios<\/b><\/strong><\/h2>\r\n<p><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter wp-image-77974 size-full\" src=\"https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2026\/10\/Costs-and-Expense-Ratio.png\" alt=\"Costs and Expense Ratio\" width=\"1080\" height=\"1080\" srcset=\"https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2026\/10\/Costs-and-Expense-Ratio.png 1080w, https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2026\/10\/Costs-and-Expense-Ratio-300x300.png 300w, https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2026\/10\/Costs-and-Expense-Ratio-1024x1024.png 1024w, https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2026\/10\/Costs-and-Expense-Ratio-150x150.png 150w, https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2026\/10\/Costs-and-Expense-Ratio-768x768.png 768w, https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2026\/10\/Costs-and-Expense-Ratio-50x50.png 50w, https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2026\/10\/Costs-and-Expense-Ratio-100x100.png 100w, https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2026\/10\/Costs-and-Expense-Ratio-96x96.png 96w\" sizes=\"(max-width: 1080px) 100vw, 1080px\" \/><\/p>\r\n<p>Every mutual fund has costs\u2014management fees, administrative expenses, and distribution charges. These are expressed as the <strong><b>expense ratio<\/b><\/strong>.<\/p>\r\n<ul>\r\n<li><strong>Active funds:<\/strong> about 0.5\u20131% (direct plans) to 1.5\u20132.1% (regular plans) annually, excluding GST and other statutory levies, which have been charged separately since April 2026.<\/li>\r\n<li><strong>Passive funds:<\/strong> about 0.1\u20130.5%.<\/li>\r\n<\/ul>\r\n<p>Over decades, even small differences compound significantly. For instance, \u20b910 lakh invested for 20 years at 12% return with a 2% expense ratio yields far less than the same investment with a 0.2% expense ratio: roughly \u20b967 lakh (at a 10% net return) versus about \u20b993 lakh (at 11.8%), a gap of around \u20b926 lakh.<\/p>\r\n<p>&nbsp;<\/p>\r\n<p>&nbsp;<\/p>\r\n<p>&nbsp;<\/p>\r\n<p>&nbsp;<\/p><\/div>\n<div id='text_slider_slide08' class='sa_hover_container' data-hash='Investor-Perspective' style='padding:4.9% 5%; margin:0px 0%; background-color:rgb(255, 255, 255); min-height:405px; '><h2 style=\"text-align: left\"><strong>16.8 <\/strong><strong><b>Investor Perspective<\/b><\/strong><\/h2>\r\n<p><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter wp-image-77975 size-full\" src=\"https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2026\/10\/Investor-Perspective.png\" alt=\"Investor Perspective\" width=\"1080\" height=\"1080\" srcset=\"https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2026\/10\/Investor-Perspective.png 1080w, https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2026\/10\/Investor-Perspective-300x300.png 300w, https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2026\/10\/Investor-Perspective-1024x1024.png 1024w, https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2026\/10\/Investor-Perspective-150x150.png 150w, https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2026\/10\/Investor-Perspective-768x768.png 768w, https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2026\/10\/Investor-Perspective-50x50.png 50w, https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2026\/10\/Investor-Perspective-100x100.png 100w, https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2026\/10\/Investor-Perspective-96x96.png 96w\" sizes=\"(max-width: 1080px) 100vw, 1080px\" \/><\/p>\r\n<p>From an investor\u2019s standpoint, the choice between active and passive funds depends on:<\/p>\r\n<ul>\r\n<li><b><\/b><strong><b>Risk Appetite:<\/b><\/strong>Aggressive investors may prefer active funds.<\/li>\r\n<li><b><\/b><strong><b>Cost Sensitivity:<\/b><\/strong>Passive funds suit costconscious investors.<\/li>\r\n<li><b><\/b><strong><b>Belief in Market Efficiency:<\/b><\/strong>If you believe markets are efficient, passive is better.<\/li>\r\n<li><b><\/b><strong><b>Time Horizon:<\/b><\/strong>Longterm investors often benefit from SIPs in index funds.<\/li>\r\n<\/ul>\r\n<p><strong><b>Table: Investor Profiles and Suitable Funds<\/b><\/strong><\/p>\r\n<table>\r\n<tbody>\r\n<tr>\r\n<td>\r\n<p><strong><b>Investor Type<\/b><\/strong><\/p>\r\n<\/td>\r\n<td>\r\n<p><strong><b>Suitable Fund<\/b><\/strong><\/p>\r\n<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>\r\n<p><strong><b>Conservative<\/b><\/strong><\/p>\r\n<\/td>\r\n<td>\r\n<p>Debt\/Liquid Funds<\/p>\r\n<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>\r\n<p><strong><b>Moderate<\/b><\/strong><\/p>\r\n<\/td>\r\n<td>\r\n<p>Hybrid Funds<\/p>\r\n<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>\r\n<p><strong><b>Aggressive<\/b><\/strong><\/p>\r\n<\/td>\r\n<td>\r\n<p>Active Equity Funds<\/p>\r\n<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>\r\n<p><strong><b>Cost-Conscious<\/b><\/strong><\/p>\r\n<\/td>\r\n<td>\r\n<p>Index Funds<\/p>\r\n<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>\r\n<p><strong><b>Thematic Believer<\/b><\/strong><\/p>\r\n<\/td>\r\n<td>\r\n<p>Sector Funds<\/p>\r\n<\/td>\r\n<\/tr>\r\n<\/tbody>\r\n<\/table>\r\n<p>&nbsp;<\/p>\r\n<p>&nbsp;<\/p>\r\n<p>&nbsp;<\/p>\r\n<p>&nbsp;<\/p>\r\n<p>&nbsp;<\/p><\/div>\n<\/div>\n<\/div>\n<script type='text\/javascript'>\n\tjQuery(document).ready(function() {\n\t\tjQuery('#text_slider').owlCarousel({\n\t\t\titems : 1,\n\t\t\tsmartSpeed : 400,\n\t\t\tautoplay : false,\n\t\t\tautoplayHoverPause : false,\n\t\t\tsmartSpeed : 400,\n\t\t\tfluidSpeed : 400,\n\t\t\tautoplaySpeed : 400,\n\t\t\tnavSpeed : 400,\n\t\t\tdotsSpeed : 400,\n\t\t\tdotsEach : 1,\n\t\t\tloop : false,\n\t\t\tnav : true,\n\t\t\tnavText : 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5);\n\t\t});\n\t\tjQuery('.text_slider_goto7').click(function(event){\n\t\t\towl_goto.trigger('to.owl.carousel', 6);\n\t\t});\n\t\tjQuery('.text_slider_goto8').click(function(event){\n\t\t\towl_goto.trigger('to.owl.carousel', 7);\n\t\t});\n\t\tvar resize_77908 = jQuery('.owl-carousel');\n\t\tresize_77908.on('initialized.owl.carousel', function(e) {\n\t\t\tif (typeof(Event) === 'function') {\n\t\t\t\twindow.dispatchEvent(new Event('resize'));\n\t\t\t} else {\n\t\t\t\tvar evt = window.document.createEvent('UIEvents');\n\t\t\t\tevt.initUIEvent('resize', true, false, window, 0);\n\t\t\t\twindow.dispatchEvent(evt);\n\t\t\t}\n\t\t});\n\t});\n<\/script>\n<\/p><p>\u00a0<\/p>                    <\/div>\n\t\t        \n                    <div id=\"slides-tab\" class=\"clearfix eael-tab-content-item \" data-title-link=\"slides-tab\">\n\t\t\t\t        <p><div class='white' style='background:rgb(255, 255, 255); border:solid 0px rgb(255, 255, 255); border-radius:0px; padding:0px 0px 0px 1px;'>\n<div id='text_slider' class='owl-carousel sa_owl_theme owl-pagination-true' data-slider-id='text_slider' style='visibility: visible;visibility:visible;'>\n<div id='text_slider_slide01' class='sa_hover_container' data-hash='Deep-Dive-into-Active-vs-Passive-Mutual-Funds' style='padding:4.9% 5%; margin:0px 0%; background-color:rgb(255, 255, 255); min-height:405px; '><h2 style=\"text-align: left\"><strong>16.1 <\/strong><strong><b>Deep Dive into Active vs Passive Mutual Funds<\/b><\/strong><\/h2>\r\n<p><img fetchpriority=\"high\" decoding=\"async\" class=\"aligncenter wp-image-77968 size-full\" src=\"https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2026\/10\/Active-vs-Passive-Funds-1.png\" alt=\"Active vs Passive Funds\" width=\"1080\" height=\"1080\" srcset=\"https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2026\/10\/Active-vs-Passive-Funds-1.png 1080w, https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2026\/10\/Active-vs-Passive-Funds-1-300x300.png 300w, https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2026\/10\/Active-vs-Passive-Funds-1-1024x1024.png 1024w, https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2026\/10\/Active-vs-Passive-Funds-1-150x150.png 150w, https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2026\/10\/Active-vs-Passive-Funds-1-768x768.png 768w, https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2026\/10\/Active-vs-Passive-Funds-1-50x50.png 50w, https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2026\/10\/Active-vs-Passive-Funds-1-100x100.png 100w, https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2026\/10\/Active-vs-Passive-Funds-1-96x96.png 96w\" sizes=\"(max-width: 1080px) 100vw, 1080px\" \/><\/p>\r\n<p>&nbsp;<\/p>\r\n<p>When we talk about mutual funds, the distinction between active and passive management is one of the most fundamental concepts in investing. Understanding this difference is crucial because it directly impacts the risk you take, the costs you incur, and the returns you can expect. Let\u2019s explore both approaches in depth, with real-world examples, structured comparisons, and analytical insights.<\/p>\r\n<p><strong><b>Active Mutual Funds \u2013 The Pursuit of Alpha<\/b><\/strong><\/p>\r\n<p>An active mutual fund is essentially a fund where the manager is not content with simply matching the market. Instead, the goal is to beat the benchmark. The benchmark could be an index like the Nifty 50, S&amp;P 500, or MSCI Emerging Markets Index, depending on the fund\u2019s category. The excess return generated over the benchmark is called alpha.<\/p>\r\n<p>Active managers employ a wide range of strategies. Some focus on value investing, identifying companies trading below their intrinsic worth. For instance, during the 2008 financial crisis, many banks were trading at a fraction of their book value. A value-oriented manager who picked strong banks at that time would have generated significant alpha once the sector recovered. On the other hand, growth investing\u00a0looks at companies reinvesting profits to expand rapidly. Think of Amazon in the early 2000s\u2014despite low profits, its reinvestment strategy fueled exponential growth, rewarding investors who believed in its long-term trajectory.<\/p>\r\n<p>Active funds also use sector rotation, momentum strategies, contrarian bets, and even macroeconomic forecasting. For example, a manager anticipating rising interest rates might overweight financials and underweight real estate. The skill lies in making informed deviations from the benchmark to capture opportunities.<\/p>\r\n<p>However, active management comes with higher costs\u00a0(expense ratios, research, trading fees) and higher risks. Not every manager succeeds in generating alpha consistently. In fact, studies show that over long horizons, a majority of active funds underperform their benchmarks after costs. This makes the choice of fund manager critical.<\/p>\r\n<p><strong>Passive Mutual Funds \u2013 The Simplicity of Index Tracking<\/strong><\/p>\r\n<p>A passive fund, often called an <strong>index fund,<\/strong> takes a very different approach. Instead of trying to beat the market, it simply aims to mirror the benchmark. If you invest in a Nifty 50 index fund, the portfolio will hold the same 50 companies in the same proportion as the index. The objective is not to outperform but to replicate.<\/p>\r\n<p>The advantage here is low cost. Since there\u2019s no need for expensive research teams or frequent trading, expense ratios are minimal. For example, while an active equity fund in India may charge around 1.5\u20132% in its regular plan (roughly 0.5\u20131% in its direct plan), the direct plan of a Nifty 50 index fund may charge as little as 0.1\u20130.2%. Over decades, this cost difference compounds significantly.<\/p>\r\n<p>Passive funds also provide transparency\u00a0and predictability. You know exactly what you\u2019re investing in\u2014the index constituents. If the Nifty 50 delivers 12% in a year, your fund will deliver close to 12%, minus costs and a small tracking error. There\u2019s no uncertainty about whether the manager\u2019s strategy will succeed or fail.<\/p>\r\n<p>The downside is that you will never beat the market. Your return will almost always trail the index slightly because of costs and tracking error. But for many investors, especially those who believe markets are efficient, this trade-off is acceptable. In fact, legendary investor Warren Buffett has often recommended low\u2011cost index funds for most individuals, arguing that they outperform the majority of active managers over time.<\/p>\r\n<p><strong><b>Comparative Analysis<\/b><\/strong><\/p>\r\n<table>\r\n<tbody>\r\n<tr>\r\n<td>\r\n<p><strong><b>Aspect<\/b><\/strong><\/p>\r\n<\/td>\r\n<td>\r\n<p><strong><b>Active Funds<\/b><\/strong><\/p>\r\n<\/td>\r\n<td>\r\n<p><strong><b>Passive Funds<\/b><\/strong><\/p>\r\n<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>\r\n<p><strong><b>Objective<\/b><\/strong><\/p>\r\n<\/td>\r\n<td>\r\n<p>Beat the benchmark (generate alpha)<\/p>\r\n<\/td>\r\n<td>\r\n<p>Replicate benchmark returns<\/p>\r\n<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>\r\n<p><strong><b>Costs<\/b><\/strong><\/p>\r\n<\/td>\r\n<td>\r\n<p>Higher (\u22480.5\u20132.1% base expense ratio, depending on plan and fund size)<\/p>\r\n<\/td>\r\n<td>\r\n<p>Low (\u22480.1\u20130.5% expense ratio)<\/p>\r\n<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>\r\n<p><strong><b>Risk<\/b><\/strong><\/p>\r\n<\/td>\r\n<td>\r\n<p>Higher (depends on manager skill)<\/p>\r\n<\/td>\r\n<td>\r\n<p>Market risk only (no fund\u2011manager selection risk)<\/p>\r\n<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>\r\n<p><strong><b>Transparency<\/b><\/strong><\/p>\r\n<\/td>\r\n<td>\r\n<p>Moderate (depends on strategy disclosure)<\/p>\r\n<\/td>\r\n<td>\r\n<p>High (index constituents are public)<\/p>\r\n<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>\r\n<p><strong><b>Performance<\/b><\/strong><\/p>\r\n<\/td>\r\n<td>\r\n<p>Can outperform or underperform<\/p>\r\n<\/td>\r\n<td>\r\n<p>Usually slightly below benchmark (tracking difference)<\/p>\r\n<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>\r\n<p><strong><b>Example<\/b><\/strong><\/p>\r\n<\/td>\r\n<td>\r\n<p>Value fund picking undervalued banks<\/p>\r\n<\/td>\r\n<td>\r\n<p>Nifty 50 index fund<\/p>\r\n<\/td>\r\n<\/tr>\r\n<\/tbody>\r\n<\/table>\r\n<p>&nbsp;<\/p>\r\n<p>&nbsp;<\/p>\r\n<p>&nbsp;<\/p>\r\n<p>&nbsp;<\/p>\r\n<p>&nbsp;<\/p>\r\n<p>&nbsp;<\/p>\r\n<p>&nbsp;<\/p>\r\n<p>&nbsp;<\/p>\r\n<p>&nbsp;<\/p><\/div>\n<div id='text_slider_slide02' class='sa_hover_container' data-hash='The-Evolution-of-Mutual-Funds' style='padding:4.9% 5%; margin:0px 0%; background-color:rgb(255, 255, 255); min-height:405px; '><h2><strong><b>16.2 <\/b><\/strong><strong><b>The Evolution of Mutual Funds<\/b><\/strong><\/h2>\r\n<p><img decoding=\"async\" class=\"aligncenter wp-image-77969 size-full\" src=\"https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2026\/10\/The-Evolution-of-Mutual-Funds.png\" alt=\"The Evolution of Mutual Funds\" width=\"1080\" height=\"1080\" srcset=\"https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2026\/10\/The-Evolution-of-Mutual-Funds.png 1080w, https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2026\/10\/The-Evolution-of-Mutual-Funds-300x300.png 300w, https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2026\/10\/The-Evolution-of-Mutual-Funds-1024x1024.png 1024w, https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2026\/10\/The-Evolution-of-Mutual-Funds-150x150.png 150w, https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2026\/10\/The-Evolution-of-Mutual-Funds-768x768.png 768w, https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2026\/10\/The-Evolution-of-Mutual-Funds-50x50.png 50w, https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2026\/10\/The-Evolution-of-Mutual-Funds-100x100.png 100w, https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2026\/10\/The-Evolution-of-Mutual-Funds-96x96.png 96w\" sizes=\"(max-width: 1080px) 100vw, 1080px\" \/><\/p>\r\n<p>Mutual funds have a fascinating history that reflects the evolution of financial markets. The earliest pooled investment vehicles appeared in 18th century Europe, particularly in the Netherlands, where merchants created diversified trusts to spread risk across multiple ventures. By the late 19th century, similar structures emerged in the UK and the US, offering ordinary investors access to professional management.<\/p>\r\n<p>The modern mutual fund industry took off in the 1920s in America, with the Massachusetts Investors Trust (1924) often cited as the first open-ended mutual fund. The concept of \u201copenended\u201d meant investors could buy or redeem units at net asset value (NAV) anytime, unlike closedended funds that traded like stocks. Over decades, regulatory frameworks such as the US Investment Company Act of 1940 and India\u2019s SEBI (Mutual Funds) Regulations of 1993 and 1996 (now replaced by the SEBI (Mutual Funds) Regulations, 2026) shaped investor protection and transparency.<\/p>\r\n<p>Today, mutual funds form a multi-trillion dollar industry globally, offering everything from equity and debt funds to hybrids, ETFs, and thematic strategies. Their evolution mirrors broader economic changes: globalization, technology, and democratization of finance.<\/p>\r\n<p><strong><b>Table: Key Milestones in Mutual Fund History<\/b><\/strong><\/p>\r\n<table>\r\n<tbody>\r\n<tr>\r\n<td>\r\n<p><strong><b>Year<\/b><\/strong><\/p>\r\n<\/td>\r\n<td>\r\n<p><strong><b>Country<\/b><\/strong><\/p>\r\n<\/td>\r\n<td>\r\n<p><strong><b>Event<\/b><\/strong><\/p>\r\n<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>\r\n<p><strong><b>1774<\/b><\/strong><\/p>\r\n<\/td>\r\n<td>\r\n<p>Netherlands<\/p>\r\n<\/td>\r\n<td>\r\n<p>First pooled investment trust<\/p>\r\n<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>\r\n<p><strong><b>1924<\/b><\/strong><\/p>\r\n<\/td>\r\n<td>\r\n<p>USA<\/p>\r\n<\/td>\r\n<td>\r\n<p>Massachusetts Investors Trust launched<\/p>\r\n<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>\r\n<p><strong><b>1940<\/b><\/strong><\/p>\r\n<\/td>\r\n<td>\r\n<p>USA<\/p>\r\n<\/td>\r\n<td>\r\n<p>Investment Company Act established<\/p>\r\n<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>\r\n<p><strong><b>1963<\/b><\/strong><\/p>\r\n<\/td>\r\n<td>\r\n<p>India<\/p>\r\n<\/td>\r\n<td>\r\n<p>Unit Trust of India founded<\/p>\r\n<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>\r\n<p><strong><b>1993<\/b><\/strong><\/p>\r\n<\/td>\r\n<td>\r\n<p>India<\/p>\r\n<\/td>\r\n<td>\r\n<p>SEBI (Mutual Funds) Regulations introduced; private AMCs allowed<\/p>\r\n<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>\r\n<p><strong><b>2000s<\/b><\/strong><\/p>\r\n<\/td>\r\n<td>\r\n<p>Global<\/p>\r\n<\/td>\r\n<td>\r\n<p>Rise of ETFs and passive investing<\/p>\r\n<\/td>\r\n<\/tr>\r\n<\/tbody>\r\n<\/table>\r\n<p>&nbsp;<\/p>\r\n<p>&nbsp;<\/p>\r\n<p>&nbsp;<\/p>\r\n<p>&nbsp;<\/p>\r\n<p>&nbsp;<\/p>\r\n<p>&nbsp;<\/p>\r\n<p>&nbsp;<\/p>\r\n<p>&nbsp;<\/p><\/div>\n<div id='text_slider_slide03' class='sa_hover_container' data-hash='Growth-of-the-Industry-in-India' style='padding:4.9% 5%; margin:0px 0%; background-color:rgb(255, 255, 255); min-height:405px; '><h2 style=\"text-align: left\"><strong>16.3<\/strong><strong><b>\u00a0Growth of the Industry in India<\/b><\/strong><\/h2>\r\n<p><img decoding=\"async\" class=\"aligncenter wp-image-77970 size-full\" src=\"https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2026\/10\/Growth-of-the-Industry-in-India.png\" alt=\"Growth of the Industry in India\" width=\"1080\" height=\"1080\" srcset=\"https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2026\/10\/Growth-of-the-Industry-in-India.png 1080w, https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2026\/10\/Growth-of-the-Industry-in-India-300x300.png 300w, https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2026\/10\/Growth-of-the-Industry-in-India-1024x1024.png 1024w, https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2026\/10\/Growth-of-the-Industry-in-India-150x150.png 150w, https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2026\/10\/Growth-of-the-Industry-in-India-768x768.png 768w, https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2026\/10\/Growth-of-the-Industry-in-India-50x50.png 50w, https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2026\/10\/Growth-of-the-Industry-in-India-100x100.png 100w, https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2026\/10\/Growth-of-the-Industry-in-India-96x96.png 96w\" sizes=\"(max-width: 1080px) 100vw, 1080px\" \/><\/p>\r\n<p>India\u2019s mutual fund journey began with the Unit Trust of India (UTI)\u00a0in 1963, which dominated the market for decades. Public sector banks and insurers were allowed to launch mutual funds from 1987 (SBI Mutual Fund was the first non\u2011UTI fund), and liberalization in 1993 opened the sector to private players, both domestic and foreign. By the 2000s, firms like HDFC, ICICI Prudential, and SBI Mutual Fund became household names.<\/p>\r\n<p>The industry\u2019s growth was fueled by rising middle\u2011class incomes, awareness campaigns, and tax incentives for Equity Linked Savings Schemes (ELSS), earlier under Section 80C of the Income\u2011tax Act, 1961 and, from 1 April 2026, under Section 123 of the Income\u2011tax Act, 2025 (the deduction is available only to those who opt for the old tax regime). The introduction of Systematic Investment Plans (SIPs) revolutionized retail participation, allowing investors to contribute small amounts monthly.<\/p>\r\n<p>As of September 2026, India\u2019s mutual fund industry assets under management (AUM) stood at about \u20b982.6 lakh crore (\u20b982.6 trillion), with monthly SIP inflows at a record of about \u20b932,490 crore. Equity funds, debt funds, and hybrid funds cater to diverse needs. Technology has further accelerated adoption, with mobile apps and digital KYC making investing seamless.<\/p>\r\n<p>&nbsp;<\/p>\r\n<p>&nbsp;<\/p>\r\n<p>&nbsp;<\/p>\r\n<p>&nbsp;<\/p>\r\n<p>&nbsp;<\/p>\r\n<p>&nbsp;<\/p><\/div>\n<div id='text_slider_slide04' class='sa_hover_container' data-hash='Regulatory-Framework' style='padding:4.9% 5%; margin:0px 0%; background-color:rgb(255, 255, 255); min-height:405px; '><h2 style=\"text-align: left\"><strong>16.4. <\/strong><strong><b>Regulatory Framework<\/b><\/strong><\/h2>\r\n<p><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter wp-image-77971 size-full\" src=\"https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2026\/10\/Regulatory-Framework.png\" alt=\"Regulatory Framework\" width=\"1080\" height=\"1080\" srcset=\"https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2026\/10\/Regulatory-Framework.png 1080w, https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2026\/10\/Regulatory-Framework-300x300.png 300w, https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2026\/10\/Regulatory-Framework-1024x1024.png 1024w, https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2026\/10\/Regulatory-Framework-150x150.png 150w, https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2026\/10\/Regulatory-Framework-768x768.png 768w, https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2026\/10\/Regulatory-Framework-50x50.png 50w, https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2026\/10\/Regulatory-Framework-100x100.png 100w, https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2026\/10\/Regulatory-Framework-96x96.png 96w\" sizes=\"(max-width: 1080px) 100vw, 1080px\" \/><\/p>\r\n<p>Mutual funds operate under strict regulation to protect investors. In India, the Securities and Exchange Board of India (SEBI)\u00a0sets rules on disclosures, risk management, and fund categorization. Globally, similar bodies exist: the SEC in the US, FCA in the UK.<\/p>\r\n<p>Key regulations include:<\/p>\r\n<ul>\r\n<li><b><\/b><strong><b>Transparency: <\/b><\/strong>Funds must disclose portfolio holdings regularly.<\/li>\r\n<li><b><\/b><strong><b>Categorization: <\/b><\/strong>Equity, debt, hybrid, life cycle and other schemes (index funds, ETFs, fund of funds) are clearly defined. SEBI\u2019s 2017 categorisation framework was revised in February 2026: the solution\u2011oriented category (retirement and children\u2019s funds) was discontinued, Life Cycle Funds were added, sectoral and thematic funds became separate scheme types, and index funds and ETFs must keep at least 95% of their assets in the securities of the index they track.<\/li>\r\n<li><b><\/b><strong><b>Expense Ratio Caps:\u00a0 <\/b><\/strong>SEBI limits how much AMCs can charge. From 1 April 2026, the cap applies to a \u2018base expense ratio\u2019, with statutory levies such as GST and STT disclosed separately.<\/li>\r\n<li><b><\/b><strong><b>Investor Protection: <\/b><\/strong>Rules on mis-selling, advertising, and grievance redressal.<\/li>\r\n<\/ul>\r\n<p><strong><b>Table: Regulatory Comparison<\/b><\/strong><\/p>\r\n<table>\r\n<tbody>\r\n<tr>\r\n<td>\r\n<p><strong><b>Aspect<\/b><\/strong><\/p>\r\n<\/td>\r\n<td>\r\n<p><strong><b>India (SEBI)<\/b><\/strong><\/p>\r\n<\/td>\r\n<td>\r\n<p><strong><b>USA (SEC)<\/b><\/strong><\/p>\r\n<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>\r\n<p><strong><b>Expense Ratio Cap<\/b><\/strong><\/p>\r\n<\/td>\r\n<td>\r\n<p>Yes<\/p>\r\n<\/td>\r\n<td>\r\n<p>No strict cap<\/p>\r\n<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>\r\n<p><strong><b>Portfolio Disclosure<\/b><\/strong><\/p>\r\n<\/td>\r\n<td>\r\n<p>Monthly (fortnightly for debt schemes)<\/p>\r\n<\/td>\r\n<td>\r\n<p>Quarterly<\/p>\r\n<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>\r\n<p><strong><b>Fund Categorization<\/b><\/strong><\/p>\r\n<\/td>\r\n<td>\r\n<p>Standardized<\/p>\r\n<\/td>\r\n<td>\r\n<p>Flexible<\/p>\r\n<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>\r\n<p><strong><b>Investor Grievance<\/b><\/strong><\/p>\r\n<\/td>\r\n<td>\r\n<p>SCORES and SMART ODR platforms<\/p>\r\n<\/td>\r\n<td>\r\n<p>SEC complaint system<\/p>\r\n<\/td>\r\n<\/tr>\r\n<\/tbody>\r\n<\/table>\r\n<p><strong><b>\u00a0<\/b><\/strong><\/p>\r\n<p>&nbsp;<\/p>\r\n<p>&nbsp;<\/p>\r\n<p>&nbsp;<\/p>\r\n<p>&nbsp;<\/p>\r\n<p>&nbsp;<\/p><\/div>\n<div id='text_slider_slide05' class='sa_hover_container' data-hash='Types-of-Mutual-Funds' style='padding:4.9% 5%; margin:0px 0%; background-color:rgb(255, 255, 255); min-height:405px; '><h2 style=\"text-align: left\">16.5 <strong><b>Types of Mutual Funds<\/b><\/strong><\/h2>\r\n<p><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter wp-image-77972 size-full\" src=\"https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2026\/10\/Types-of-Mutual-Funds.png\" alt=\"Types of Mutual Funds\" width=\"1080\" height=\"1080\" srcset=\"https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2026\/10\/Types-of-Mutual-Funds.png 1080w, https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2026\/10\/Types-of-Mutual-Funds-300x300.png 300w, https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2026\/10\/Types-of-Mutual-Funds-1024x1024.png 1024w, https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2026\/10\/Types-of-Mutual-Funds-150x150.png 150w, https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2026\/10\/Types-of-Mutual-Funds-768x768.png 768w, https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2026\/10\/Types-of-Mutual-Funds-50x50.png 50w, https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2026\/10\/Types-of-Mutual-Funds-100x100.png 100w, https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2026\/10\/Types-of-Mutual-Funds-96x96.png 96w\" sizes=\"(max-width: 1080px) 100vw, 1080px\" \/><\/p>\r\n<p>Mutual funds can be classified in multiple ways:<\/p>\r\n<ul>\r\n<li><b><\/b><strong><b>Equity Funds: <\/b><\/strong>Invest in stocks; high risk, higher return potential.<\/li>\r\n<li><b><\/b><strong><b>Debt Funds: <\/b><\/strong>Invest in bonds; lower risk, steady income.<\/li>\r\n<li><b><\/b><strong><b>Hybrid Funds: <\/b><\/strong>Mix of equity and debt.<\/li>\r\n<li><b><\/b><strong><b>Index Funds\/ETFs: <\/b><\/strong>Passive funds tracking benchmarks.<\/li>\r\n<li><b><\/b><strong><b>Sector\/Thematic Funds: <\/b><\/strong>Focused on industries like IT, pharma, or ESG.<\/li>\r\n<\/ul>\r\n<p><strong><b>Table: Fund Types and Risk Profiles<\/b><\/strong><\/p>\r\n<table>\r\n<tbody>\r\n<tr>\r\n<td>\r\n<p><strong><b>Fund Type<\/b><\/strong><\/p>\r\n<\/td>\r\n<td>\r\n<p><strong><b>Example<\/b><\/strong><\/p>\r\n<\/td>\r\n<td>\r\n<p><strong><b>Risk<\/b><\/strong><\/p>\r\n<\/td>\r\n<td>\r\n<p><strong><b>Return Potential<\/b><\/strong><\/p>\r\n<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>\r\n<p><strong><b>Equity<\/b><\/strong><\/p>\r\n<\/td>\r\n<td>\r\n<p>Large Cap Fund<\/p>\r\n<\/td>\r\n<td>\r\n<p>High<\/p>\r\n<\/td>\r\n<td>\r\n<p>High<\/p>\r\n<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>\r\n<p><strong><b>Debt<\/b><\/strong><\/p>\r\n<\/td>\r\n<td>\r\n<p>Liquid Fund<\/p>\r\n<\/td>\r\n<td>\r\n<p>Low<\/p>\r\n<\/td>\r\n<td>\r\n<p>Low<\/p>\r\n<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>\r\n<p><strong><b>Hybrid<\/b><\/strong><\/p>\r\n<\/td>\r\n<td>\r\n<p>Balanced Advantage<\/p>\r\n<\/td>\r\n<td>\r\n<p>Moderate<\/p>\r\n<\/td>\r\n<td>\r\n<p>Moderate<\/p>\r\n<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>\r\n<p><strong><b>Index<\/b><\/strong><\/p>\r\n<\/td>\r\n<td>\r\n<p>Nifty 50 Index Fund<\/p>\r\n<\/td>\r\n<td>\r\n<p>Market Risk<\/p>\r\n<\/td>\r\n<td>\r\n<p>Benchmark Returns<\/p>\r\n<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>\r\n<p><strong><b>Sector<\/b><\/strong><\/p>\r\n<\/td>\r\n<td>\r\n<p>Pharma Fund<\/p>\r\n<\/td>\r\n<td>\r\n<p>Concentrated Risk<\/p>\r\n<\/td>\r\n<td>\r\n<p>Variable<\/p>\r\n<\/td>\r\n<\/tr>\r\n<\/tbody>\r\n<\/table>\r\n<p>&nbsp;<\/p>\r\n<p>&nbsp;<\/p>\r\n<p>&nbsp;<\/p>\r\n<p>&nbsp;<\/p>\r\n<p>&nbsp;<\/p>\r\n<p>&nbsp;<\/p>\r\n<p>&nbsp;<\/p><\/div>\n<div id='text_slider_slide06' class='sa_hover_container' data-hash='Role-of-Fund-Managers' style='padding:4.9% 5%; margin:0px 0%; background-color:rgb(255, 255, 255); min-height:405px; '><h2 style=\"text-align: left\"><strong>16.6 <\/strong><strong><b>Role of Fund Managers<\/b><\/strong><\/h2>\r\n<p><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter wp-image-77973 size-full\" src=\"https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2026\/10\/Role-of-Fund-Managers.png\" alt=\"Role of Fund Managers\" width=\"1080\" height=\"1080\" srcset=\"https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2026\/10\/Role-of-Fund-Managers.png 1080w, https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2026\/10\/Role-of-Fund-Managers-300x300.png 300w, https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2026\/10\/Role-of-Fund-Managers-1024x1024.png 1024w, https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2026\/10\/Role-of-Fund-Managers-150x150.png 150w, https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2026\/10\/Role-of-Fund-Managers-768x768.png 768w, https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2026\/10\/Role-of-Fund-Managers-50x50.png 50w, https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2026\/10\/Role-of-Fund-Managers-100x100.png 100w, https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2026\/10\/Role-of-Fund-Managers-96x96.png 96w\" sizes=\"(max-width: 1080px) 100vw, 1080px\" \/><\/p>\r\n<p>Fund managers are the architects of active funds. Their role includes:<\/p>\r\n<ul>\r\n<li><b><\/b><strong><b>Stock Selection: <\/b><\/strong>Identifying undervalued or high-growth companies.<\/li>\r\n<li><b><\/b><strong><b>Asset Allocation: <\/b><\/strong>Balancing equity, debt, and cash.<\/li>\r\n<li><b><\/b><strong><b>Risk Management: <\/b><\/strong>Hedging against market downturns.<\/li>\r\n<li><b><\/b><strong><b>Performance Monitoring: <\/b><\/strong>Ensuring returns align with objectives.<\/li>\r\n<\/ul>\r\n<p>For example, a manager running a value fund may overweight PSU banks during a recovery phase, while a growth manager may focus on fast\u2011growing technology companies. Their decisions directly impact alpha generation.<\/p>\r\n<p>&nbsp;<\/p>\r\n<p>&nbsp;<\/p>\r\n<p>&nbsp;<\/p>\r\n<p>&nbsp;<\/p>\r\n<p>&nbsp;<\/p><\/div>\n<div id='text_slider_slide07' class='sa_hover_container' data-hash='Costs-and-Expense-Ratios' style='padding:4.9% 5%; margin:0px 0%; background-color:rgb(255, 255, 255); min-height:405px; '><h2 style=\"text-align: left\"><strong>16.7 <\/strong><strong><b>Costs and Expense Ratios<\/b><\/strong><\/h2>\r\n<p><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter wp-image-77974 size-full\" src=\"https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2026\/10\/Costs-and-Expense-Ratio.png\" alt=\"Costs and Expense Ratio\" width=\"1080\" height=\"1080\" srcset=\"https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2026\/10\/Costs-and-Expense-Ratio.png 1080w, https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2026\/10\/Costs-and-Expense-Ratio-300x300.png 300w, https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2026\/10\/Costs-and-Expense-Ratio-1024x1024.png 1024w, https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2026\/10\/Costs-and-Expense-Ratio-150x150.png 150w, https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2026\/10\/Costs-and-Expense-Ratio-768x768.png 768w, https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2026\/10\/Costs-and-Expense-Ratio-50x50.png 50w, https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2026\/10\/Costs-and-Expense-Ratio-100x100.png 100w, https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2026\/10\/Costs-and-Expense-Ratio-96x96.png 96w\" sizes=\"(max-width: 1080px) 100vw, 1080px\" \/><\/p>\r\n<p>Every mutual fund has costs\u2014management fees, administrative expenses, and distribution charges. These are expressed as the <strong><b>expense ratio<\/b><\/strong>.<\/p>\r\n<ul>\r\n<li><strong>Active funds:<\/strong> about 0.5\u20131% (direct plans) to 1.5\u20132.1% (regular plans) annually, excluding GST and other statutory levies, which have been charged separately since April 2026.<\/li>\r\n<li><strong>Passive funds:<\/strong> about 0.1\u20130.5%.<\/li>\r\n<\/ul>\r\n<p>Over decades, even small differences compound significantly. For instance, \u20b910 lakh invested for 20 years at 12% return with a 2% expense ratio yields far less than the same investment with a 0.2% expense ratio: roughly \u20b967 lakh (at a 10% net return) versus about \u20b993 lakh (at 11.8%), a gap of around \u20b926 lakh.<\/p>\r\n<p>&nbsp;<\/p>\r\n<p>&nbsp;<\/p>\r\n<p>&nbsp;<\/p>\r\n<p>&nbsp;<\/p><\/div>\n<div id='text_slider_slide08' class='sa_hover_container' data-hash='Investor-Perspective' style='padding:4.9% 5%; margin:0px 0%; background-color:rgb(255, 255, 255); min-height:405px; '><h2 style=\"text-align: left\"><strong>16.8 <\/strong><strong><b>Investor Perspective<\/b><\/strong><\/h2>\r\n<p><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter wp-image-77975 size-full\" src=\"https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2026\/10\/Investor-Perspective.png\" alt=\"Investor Perspective\" width=\"1080\" height=\"1080\" srcset=\"https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2026\/10\/Investor-Perspective.png 1080w, https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2026\/10\/Investor-Perspective-300x300.png 300w, https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2026\/10\/Investor-Perspective-1024x1024.png 1024w, https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2026\/10\/Investor-Perspective-150x150.png 150w, https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2026\/10\/Investor-Perspective-768x768.png 768w, https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2026\/10\/Investor-Perspective-50x50.png 50w, https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2026\/10\/Investor-Perspective-100x100.png 100w, https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2026\/10\/Investor-Perspective-96x96.png 96w\" sizes=\"(max-width: 1080px) 100vw, 1080px\" \/><\/p>\r\n<p>From an investor\u2019s standpoint, the choice between active and passive funds depends on:<\/p>\r\n<ul>\r\n<li><b><\/b><strong><b>Risk Appetite:<\/b><\/strong>Aggressive investors may prefer active funds.<\/li>\r\n<li><b><\/b><strong><b>Cost Sensitivity:<\/b><\/strong>Passive funds suit costconscious investors.<\/li>\r\n<li><b><\/b><strong><b>Belief in Market Efficiency:<\/b><\/strong>If you believe markets are efficient, passive is better.<\/li>\r\n<li><b><\/b><strong><b>Time Horizon:<\/b><\/strong>Longterm investors often benefit from SIPs in index funds.<\/li>\r\n<\/ul>\r\n<p><strong><b>Table: Investor Profiles and Suitable Funds<\/b><\/strong><\/p>\r\n<table>\r\n<tbody>\r\n<tr>\r\n<td>\r\n<p><strong><b>Investor Type<\/b><\/strong><\/p>\r\n<\/td>\r\n<td>\r\n<p><strong><b>Suitable Fund<\/b><\/strong><\/p>\r\n<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>\r\n<p><strong><b>Conservative<\/b><\/strong><\/p>\r\n<\/td>\r\n<td>\r\n<p>Debt\/Liquid Funds<\/p>\r\n<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>\r\n<p><strong><b>Moderate<\/b><\/strong><\/p>\r\n<\/td>\r\n<td>\r\n<p>Hybrid Funds<\/p>\r\n<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>\r\n<p><strong><b>Aggressive<\/b><\/strong><\/p>\r\n<\/td>\r\n<td>\r\n<p>Active Equity Funds<\/p>\r\n<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>\r\n<p><strong><b>Cost-Conscious<\/b><\/strong><\/p>\r\n<\/td>\r\n<td>\r\n<p>Index Funds<\/p>\r\n<\/td>\r\n<\/tr>\r\n<tr>\r\n<td>\r\n<p><strong><b>Thematic Believer<\/b><\/strong><\/p>\r\n<\/td>\r\n<td>\r\n<p>Sector Funds<\/p>\r\n<\/td>\r\n<\/tr>\r\n<\/tbody>\r\n<\/table>\r\n<p>&nbsp;<\/p>\r\n<p>&nbsp;<\/p>\r\n<p>&nbsp;<\/p>\r\n<p>&nbsp;<\/p>\r\n<p>&nbsp;<\/p><\/div>\n<\/div>\n<\/div>\n<script type='text\/javascript'>\n\tjQuery(document).ready(function() {\n\t\tjQuery('#text_slider').owlCarousel({\n\t\t\titems : 1,\n\t\t\tsmartSpeed : 400,\n\t\t\tautoplay : false,\n\t\t\tautoplayHoverPause : false,\n\t\t\tsmartSpeed : 400,\n\t\t\tfluidSpeed : 400,\n\t\t\tautoplaySpeed : 400,\n\t\t\tnavSpeed : 400,\n\t\t\tdotsSpeed : 400,\n\t\t\tdotsEach : 1,\n\t\t\tloop : false,\n\t\t\tnav : true,\n\t\t\tnavText : 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5);\n\t\t});\n\t\tjQuery('.text_slider_goto7').click(function(event){\n\t\t\towl_goto.trigger('to.owl.carousel', 6);\n\t\t});\n\t\tjQuery('.text_slider_goto8').click(function(event){\n\t\t\towl_goto.trigger('to.owl.carousel', 7);\n\t\t});\n\t\tvar resize_77908 = jQuery('.owl-carousel');\n\t\tresize_77908.on('initialized.owl.carousel', function(e) {\n\t\t\tif (typeof(Event) === 'function') {\n\t\t\t\twindow.dispatchEvent(new Event('resize'));\n\t\t\t} else {\n\t\t\t\tvar evt = window.document.createEvent('UIEvents');\n\t\t\t\tevt.initUIEvent('resize', true, false, window, 0);\n\t\t\t\twindow.dispatchEvent(evt);\n\t\t\t}\n\t\t});\n\t});\n<\/script>\n<\/p><p>\u00a0<\/p>                    <\/div>\n\t\t        \n                    <div id=\"videos-tab\" class=\"clearfix eael-tab-content-item \" data-title-link=\"videos-tab\">\n\t\t\t\t        <p><img decoding=\"async\" class=\"aligncenter\" src=\"https:\/\/www.5paisa.com\/finschool\/wp-content\/uploads\/2021\/10\/coming-soon-person-g8026473a8_1920-removebg-preview.png\" \/><\/p>                    <\/div>\n\t\t                    <\/div>\n        <\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t<\/div>\n\t\t","protected":false},"excerpt":{"rendered":"<p>Study Slides Videos 16.1 Deep Dive into Active vs Passive Mutual Funds &nbsp; When we talk about mutual funds, the distinction between active and passive management is one of the most fundamental concepts in investing. Understanding this difference is crucial because it directly impacts the risk you take, the costs you incur, and the returns &#8230; <a title=\"Index Funds\" class=\"read-more\" href=\"https:\/\/www.5paisa.com\/finschool\/course\/financial-planning-through-mutual-funds-course\/index-funds\/\" aria-label=\"Read more about Index Funds\">Read more<\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"parent":11088,"menu_order":14,"comment_status":"closed","ping_status":"closed","template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[],"class_list":["post-77976","markets","type-markets","status-publish","format-standard","hentry"],"acf":[],"_links":{"self":[{"href":"https:\/\/www.5paisa.com\/finschool\/wp-json\/wp\/v2\/markets\/77976","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.5paisa.com\/finschool\/wp-json\/wp\/v2\/markets"}],"about":[{"href":"https:\/\/www.5paisa.com\/finschool\/wp-json\/wp\/v2\/types\/markets"}],"author":[{"embeddable":true,"href":"https:\/\/www.5paisa.com\/finschool\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.5paisa.com\/finschool\/wp-json\/wp\/v2\/comments?post=77976"}],"version-history":[{"count":12,"href":"https:\/\/www.5paisa.com\/finschool\/wp-json\/wp\/v2\/markets\/77976\/revisions"}],"predecessor-version":[{"id":78110,"href":"https:\/\/www.5paisa.com\/finschool\/wp-json\/wp\/v2\/markets\/77976\/revisions\/78110"}],"up":[{"embeddable":true,"href":"https:\/\/www.5paisa.com\/finschool\/wp-json\/wp\/v2\/markets\/11088"}],"wp:attachment":[{"href":"https:\/\/www.5paisa.com\/finschool\/wp-json\/wp\/v2\/media?parent=77976"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.5paisa.com\/finschool\/wp-json\/wp\/v2\/categories?post=77976"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}