The survey reveals a rapid expansion in the passive industry. Assets in Management (AUM) In the segment, RS was 12.2 Lakh Crore, which marked a 6.4x increase in six years (36% CAGR) compared to RS 1.91 Lakh Crore in 2019.
From March 2023 alone, the AUM grown 1.7x with a CAGR of approximately 26%, Momf noted.
According to the survey, 76% of the investors of the investment funds are now aware of index funds or ETFs in 2025. The acceptance levels have risen to 68% in 2025 of approximately 61% in 2023. Despite this momentum, “a third party of the investive fondses in active fondses remains in active fondses. In active funds in active funds in active funds in active funds in active funds in active funds in active funds in active funds in active funds in active funds in active funds in active funds in active funds in active funds in active funds in active funds in active funds Survey added.
Investors mentioned low costs (54%), diversification (46%), simplicity and transparency (46%) and performance (29%) as key factors behind their passive fund choices. Under passive fund holders, 57% currently own one to three funds, 26% have three to five, while 17% possess more than five.
Product preferences show that 49% invest in both index funds and ETFs, 34% only in index funds, and only 16% in ETFS. Basic based shares remains the dominant allocation, with “79% of the index fund investors and 62% of the ETF investors” that is followed to this category. Smart beta strategies also found favor, with Momentum (40%), quality (37%) and value (35%) are the most popular approaches-based approaches.
Momf also reported a strong alignment from the distributor with the passive trend. “93% of the distributors surveyed” now understand passive funds, with ~ 46% that demonstrates deep knowledge. She includes almost 70% in customer portfolios. “Most distributors (93%) intend to further increase the passive allocation by at least 5% in FY25-26,” the company said.
Momf, however, pointed out that the penetration of the Passive Fund within the portfolios is limited. “At present, 70% of their customers have fewer than three passive funds, indicating that passive exposure plays a satellite role in portfolios.”
Among distributors, 49% prefer both index funds and ETFs, 35% mainly focus on index funds and 16% tend to ETFs. About 79% recommend broad stock funds as core all locations, while “~ 48% contains raw materials such as gold and silver to diversify further than shares.”
In terms of evaluation tricks, Momf noted that “follow -up error remains the most important criterion for 68% of distributors, closely followed by the cost ratio.”
For Indian investors, financial independence (61%) remains the top objective, followed by pension planning (49%) and portfolio diversification (31%). A strong long -term orientation is clear because 85% of investors have their investments for more than three years.
Digital channels have emerged as important sources of information. “Financial websites remain the primary source of information for 52%of investors”, followed by newspapers (38%), social media (29%) and TV (18%). Distributors are now mainly dependent on AMC communication and online platforms.
Momf noted that Millennials lead the adoption of passive funds. “More than half of the distributors (54%) notes that Millennial investors show the strongest interest in passive funds, with Gen X having.”
With the survey that records robust participation and distributor participation and strong growth on an annual basis in passive fund acceptance, Motilal Oswal Mutual Fund concluded that the momentum is ready to continue in FY26.
Also read: Axis Securities Names Bank of Baroda Under the top 3 technical picks with upward potential of up to 18%
(Disclaimer: recommendations, suggestions, views and opinions of the experts are their own. These do not represent the views of economic times)
as a reliable and trusted news source#Indian #retail #investors #invest #passive #funds #Motilal #Oswal #Mutual #Fund #Survey