https://v2.webnotes.in/tags/spiva/Recent content in SPIVA on WebNotesHugoen-INTue, 12 May 2026 00:00:00 +0000https://v2.webnotes.in/active-vs-passive-equity-india/Tue, 12 May 2026 00:00:00 +0000https://v2.webnotes.in/active-vs-passive-equity-india/<p>The active-versus-passive debate in Indian equity investing examines whether actively managed equity <a href="https://v2.webnotes.in/mutual-fund/">mutual funds</a> , where a fund manager selects stocks based on research and conviction, consistently deliver higher risk-adjusted returns than passively managed funds that simply replicate a market index at lower cost.</p> <p>This article presents the empirical evidence, cost analysis, and structural arguments advanced for each approach in the Indian market context as of 2024.</p> <h2 id="definitions">Definitions</h2> <p><strong>Active equity fund:</strong> A fund where a fund manager and research team construct a portfolio of stocks based on fundamental analysis, valuation, sector views, and risk assessments. The fund&rsquo;s benchmark (e.g., Nifty 50 TRI, Nifty 500 TRI) serves as the reference; the manager aims to generate alpha (return above the benchmark). Cost is higher due to research staff, portfolio management fees, and higher transaction turnover.</p>