Passive investing explosion: DSP’s Anil Ghelani predicts ETFs, index funds will command 30% of mutual fund industry

Passive investing is gaining significant traction in India, with ETFs and index funds currently accounting for about 17 percent of total mutual fund industry AUM. DSP's Anil Ghelani predicts this share could grow to 30 percent in the next five years, driven by maturing investor behaviour and shrinking alpha in large-cap segments. Passive strategies are increasingly becoming the default choice for core portfolio allocations, while active funds are likely to be used selectively for alpha opportunities in small-cap, micro-cap, and niche sector segments.