Neutral impactCorporate Action
Active vs passive mutual funds: Why fewer Indian fund managers beat passive rivals over the long term
CNBC-TV18 1 hr ago·29 Oct 2026, 5:57 pm
A recent study by Morningstar India reveals that active equity fund managers often struggle to consistently outperform passive index funds over the long term. The analysis shows that while small-cap funds have managed to beat their benchmarks in the last five years, mid-cap funds have faced significant headwinds. This performance gap highlights the growing challenge for active managers in delivering alpha in a competitive market environment.
For investors, this data suggests that choosing the right strategy is critical. Passive funds, which track an index, offer lower costs and have shown strong performance in certain segments like small caps. Active funds, however, may still appeal to those seeking to beat the market through stock selection, particularly in volatile areas. The key takeaway is that investors must carefully evaluate the track record of the fund category they are investing in.
Moving forward, investors should monitor how active managers adapt to changing market conditions. The study underscores the importance of diversifying across different market segments and understanding the specific strengths of each fund type. Keeping an eye on fee structures and historical performance will help investors make more informed decisions in this evolving landscape.
Excerpt from CNBC-TV18
Published On Oct 29, 2026 | 23:27 IST Last Updated On Oct 29, 2026 | 23:27 IST Morningstar India's study finds sharp differences in how active equity funds perform across market segments. While mid-cap funds struggle to beat passive rivals over longer periods, small-cap funds show stronger five-year results. The…Read the original at CNBC-TV18
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