Investors can invest in mutual funds in two ways — active and passive mutual funds. The evergreen debate on active versus passive debate has always persisted among the investor community. Money9 Helpline hosted Anand Rathi Private Wealth Management’s deputy CEO, Feroze Azeez, to resolve queries on active funds and passive funds, and which one is better of the two. Edited excerpts.
Manoj Rastogi: I am 36 years old and investing in SBI Blue Chip 2K, SMI Mid Cap 1K, UTI Nifty Index 1K for the last 4 years. I have a 20-year plan. Please review my portfolio.
Azeez: You have two schemes that are invested in the same asset management company. This means 3/4th of your money is invested in one company which is not a good thing. In fact, your fund manager is also the same. So you can replace that scheme. You can replace SBI focussed equity and SMI Mid Cap can also be replaced with Mirae’s mid-cap fund. UTI Nifty index you should hold, it is good.
S Ghosal, Kolkata: I invest in PGIM India Large Cap, Nippon India Growth, and HSBC Smallcap funds via SIP. Should I start investing in passive funds? What are the advantages of investing in passive funds?
Azeez: You should exit HSBC Smallcap. You have invested in smallcap with a small company. I would suggest small to be bought from larger asset management company like HDFC. You can also replace it with Kotak. Nippon should also be replaced. Hold PGIM.
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