A Comparative Analysis of Active vs Passive Mutual Funds in Terms of Performance and Risk
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Date
2025
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New Horizon College of Engineering
Abstract
Mutual fund investments have emerged as a cornerstone of modern portfolio management, offering investors diversified exposure to financial markets through professional fund management. The ongoing debate between active and passive investment strategies has gained significant momentum in recent years, particularly as investors seek to optimize their risk- adjusted returns while minimizing costs. Active mutual funds, overseen by qualified fund managers who attempt to outperform benchmark indices through strategic stock selection and market timing, compete directly with passive funds that simply track market indices with minimal intervention. This comparative analysis becomes particularly relevant the light of the mutual fund sector in India, which has experienced rapid expansion with assets under management exceeding several trillion rupees, making it among the fastest-growing investment avenues for retail and institutional investors.