HNIs embracing passive funds on under-performance of active funds
High networth individuals (HNIs) are increasingly lapping up passive funds, with their exchange-traded fund asset base registering a 66 per cent growth to Rs 34,000 crore in 2022-23, according to a report on Tuesday. HNIs are informed investors, and hence, use platforms that allow direct investing in passive funds. Moreover, passive investments are comparatively more attractive than active investments owing to their ease of investing, better liquidity, and lower cost. According to a report by Motilal Oswal Financial Services, HNIs' ETF AUM rose to Rs 34,000 crore in FY23 from Rs 20,400 crore in FY22, indicating a surge of 66 per cent. It was at Rs 13,700 crore in 2020-21 and Rs 7,500 crore in 2019-20. Further, HNIs ETF AUM has witnessed a compound annual growth rate (CAGR) of 70 per cent over FY19-FY23. This has resulted in the share of passive AUM (ETFs and Index funds) in the overall asset under management (AUM) increasing to 16.5 per cent in March 2023 from 6 per cent in June...23-05-2023
