{"id":29412,"date":"2024-03-28T02:00:48","date_gmt":"2024-03-27T20:30:48","guid":{"rendered":"https:\/\/kuvera.in\/blog\/?p=29412"},"modified":"2024-03-29T12:39:21","modified_gmt":"2024-03-29T07:09:21","slug":"active-vs-passive-approach-in-investing","status":"publish","type":"post","link":"https:\/\/kuvera.in\/blog\/active-vs-passive-approach-in-investing\/","title":{"rendered":"Active Vs Passive Approach in Investing"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_40 counter-hierarchy ez-toc-counter ez-toc-light-blue ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title\">Table of Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" area-label=\"ez-toc-toggle-icon-1\"><label for=\"item-69e3ceb498f0f\" aria-label=\"Table of Content\"><span style=\"display: flex;align-items: center;width: 35px;height: 30px;justify-content: center;direction:ltr;\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/label><input  type=\"checkbox\" id=\"item-69e3ceb498f0f\"><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/kuvera.in\/blog\/active-vs-passive-approach-in-investing\/#What_is_Active_Investing\" title=\"What is Active Investing?\">What is Active Investing?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/kuvera.in\/blog\/active-vs-passive-approach-in-investing\/#What_is_Passive_Investing\" title=\"What is Passive Investing?\">What is Passive Investing?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/kuvera.in\/blog\/active-vs-passive-approach-in-investing\/#The_Active_vs_Passive_Debate\" title=\"The Active vs. Passive Debate\">The Active vs. Passive Debate<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/kuvera.in\/blog\/active-vs-passive-approach-in-investing\/#Active_vs_Passive_What_does_the_data_say\" title=\"Active vs Passive: What does the data say?\u00a0\">Active vs Passive: What does the data say?\u00a0<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/kuvera.in\/blog\/active-vs-passive-approach-in-investing\/#SPIVA_Mid-Year_2023_India_Scorecard_Highlights\" title=\"SPIVA Mid-Year 2023 India Scorecard Highlights\">SPIVA Mid-Year 2023 India Scorecard Highlights<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/kuvera.in\/blog\/active-vs-passive-approach-in-investing\/#Is_it_the_same_in_the_US\" title=\"Is it the same in the US?\">Is it the same in the US?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/kuvera.in\/blog\/active-vs-passive-approach-in-investing\/#Need_more_proof\" title=\"Need more proof?\u00a0\">Need more proof?\u00a0<\/a><\/li><\/ul><\/nav><\/div>\n<p><span style=\"font-weight: 400;\">In investing, people often ask if active investing can do better than the market in a consistent manner. This question is at the heart of the debate between active funds vs passive funds, sparking many conversations, studies, and decisions by investors.<\/span><\/p>\n<p>&nbsp;<\/p>\n<p><span style=\"font-weight: 400;\">In this article, we&#8217;ll explore the nuances of active and passive investing, the differences, and whether the belief that the higher costs associated with active investing could indeed be worth it for better returns holds true.<\/span><\/p>\n<p>&nbsp;<\/p>\n<h4><span class=\"ez-toc-section\" id=\"What_is_Active_Investing\"><\/span><b>What is Active Investing?<\/b><span class=\"ez-toc-section-end\"><\/span><\/h4>\n<p>&nbsp;<\/p>\n<p><span style=\"font-weight: 400;\">Active investing is a proactive way to invest, with frequent buying and selling of stocks, bonds, or other securities. The goal is to outperform the stock market or a specific benchmark index such as the Nifty50 index.\u00a0<\/span><\/p>\n<p>&nbsp;<\/p>\n<p><span style=\"font-weight: 400;\">Active investors or fund managers use market research, forecasts, and their judgment to make investment decisions. The goal is to identify undervalued securities poised for growth or to sell securities expected to decline.\u00a0<\/span><\/p>\n<p>&nbsp;<\/p>\n<p><span style=\"font-weight: 400;\">The success of active investing is heavily dependent on a deep understanding of the market, a high tolerance for risk, and the ability to make timely decisions by fund managers.\u00a0<\/span><\/p>\n<p>&nbsp;<\/p>\n<h4><span class=\"ez-toc-section\" id=\"What_is_Passive_Investing\"><\/span><b>What is Passive Investing?<\/b><span class=\"ez-toc-section-end\"><\/span><\/h4>\n<p>&nbsp;<\/p>\n<p><span style=\"font-weight: 400;\">Passive investing on the other hand, adopts a more laid-back approach, often described as a &#8220;buy-and-hold&#8221; strategy. You pick a big basket of stocks that reflect the overall market, like the Nifty 50 index, and just stick with them over time, hoping to mirror how that big basket performs.\u00a0<\/span><\/p>\n<p>&nbsp;<\/p>\n<p><span style=\"font-weight: 400;\">The idea is that even though stock prices go up and down all the time, they usually go up over many years. So, if you spread your investments across a diversified portfolio, you can ride out the ups and downs and grow your money as the whole market grows.<\/span><\/p>\n<p>&nbsp;<\/p>\n<p><span style=\"font-weight: 400;\">Plus, because you&#8217;re not always buying and selling, you don&#8217;t pay as much in fees, making passive investing a cheaper way to invest.\u00a0<\/span><\/p>\n<p>&nbsp;<\/p>\n<p><a href=\"https:\/\/www.kuvera.in\/dl\/v2\/?redirect_to=dashboard-invest\/fixed-deposit?source=fd_blog_banner\"><img loading=\"lazy\" class=\"alignnone wp-image-26868\" src=\"https:\/\/kuvera.in\/blog\/wp-content\/uploads\/2023\/10\/400X100-Size-300x75.png\" sizes=\"(max-width: 400px) 100vw, 400px\" srcset=\"https:\/\/kuvera.in\/blog\/wp-content\/uploads\/2023\/10\/400X100-Size-300x75.png 300w, https:\/\/kuvera.in\/blog\/wp-content\/uploads\/2023\/10\/400X100-Size-150x38.png 150w, https:\/\/kuvera.in\/blog\/wp-content\/uploads\/2023\/10\/400X100-Size.png 400w\" alt=\"FD Rates October 2023\" width=\"400\" height=\"100\" \/><\/a><\/p>\n<p>&nbsp;<\/p>\n<p>&nbsp;<\/p>\n<h4><span class=\"ez-toc-section\" id=\"The_Active_vs_Passive_Debate\"><\/span><b>The Active vs. Passive Debate<\/b><span class=\"ez-toc-section-end\"><\/span><\/h4>\n<p>&nbsp;<\/p>\n<p><span style=\"font-weight: 400;\">So, should you actively aim to outperform the market or settle for market-average returns at a lower cost?\u00a0<\/span><\/p>\n<p>&nbsp;<\/p>\n<p><span style=\"font-weight: 400;\">Supporters of active investing believe that by carefully choosing stocks or timing the market right, investors can make more money than the market average. They think this is possible because markets aren&#8217;t perfect and sometimes there are pricing inaccuracies which creates opportunities.<\/span><\/p>\n<p>&nbsp;<\/p>\n<p><span style=\"font-weight: 400;\">Yet, many studies and financial analyses show that beating the market consistently is very hard, especially after you consider the high fees that come with active management. These fees can eat into profits, making it tough for active strategies to do better than passive ones over time.<\/span><\/p>\n<p>&nbsp;<\/p>\n<p><span style=\"font-weight: 400;\">On the other hand, Passive investing is simpler and cheaper, and by focusing on the long-term, investors can benefit from the market&#8217;s general trend upwards. Because of its simplicity, lower costs, and good performance history, many investors find passive investing appealing.<\/span><\/p>\n<p>&nbsp;<\/p>\n<h4><span class=\"ez-toc-section\" id=\"Active_vs_Passive_What_does_the_data_say\"><\/span><b>Active vs Passive: What does the data say?\u00a0<\/b><span class=\"ez-toc-section-end\"><\/span><\/h4>\n<p>&nbsp;<\/p>\n<p><span style=\"font-weight: 400;\">Let\u2019s look at some reports and data to find out which is better.<\/span><\/p>\n<p>&nbsp;<\/p>\n<p><span style=\"font-weight: 400;\">SPIVA, short for <\/span><span style=\"font-weight: 400;\">S&amp;P Indices versus Active, is one of the most detailed reports on the topic.\u00a0 This study has been ongoing for 20 years and takes place in nine different countries, providing insights into how the investment world changes over time. It looks into regions like Latin America, the United States, Canada, Europe, the Middle East, North Africa, South Africa, India, Japan, and Australia. SPIVA checks over 100 investment categories and publishes a research report twice a year, making it a go-to source for both investors and financial experts.<\/span><\/p>\n<p>&nbsp;<\/p>\n<p><span style=\"font-weight: 400;\">For our analysis, we looked at two SPIVA reports, the SPIVA Mid-year 2023 India scorecard and the SPIVA <\/span><span style=\"font-weight: 400;\">year-end 2023 US <\/span><span style=\"font-weight: 400;\">scorecard report.<\/span><\/p>\n<p>&nbsp;<\/p>\n<h4><span class=\"ez-toc-section\" id=\"SPIVA_Mid-Year_2023_India_Scorecard_Highlights\"><\/span><b>SPIVA Mid-Year 2023 India Scorecard Highlights<\/b><span class=\"ez-toc-section-end\"><\/span><\/h4>\n<p>&nbsp;<\/p>\n<p><span style=\"font-weight: 400;\">The Mid-Year 2023 SPIVA India Scorecard provides a detailed comparison between actively managed Indian equity and bond mutual funds against their benchmark indices across various investment horizons\u20141, 3, 5, and 10 years. Here are the findings of the report:<\/span><\/p>\n<p>&nbsp;<\/p>\n<p><img loading=\"lazy\" class=\"alignnone wp-image-29440\" src=\"https:\/\/kuvera.in\/blog\/wp-content\/uploads\/2024\/03\/Screenshot-2024-03-20-at-10.59.33\u202fPM-1-300x202.png\" alt=\"\" width=\"500\" height=\"336\" srcset=\"https:\/\/kuvera.in\/blog\/wp-content\/uploads\/2024\/03\/Screenshot-2024-03-20-at-10.59.33\u202fPM-1-300x202.png 300w, https:\/\/kuvera.in\/blog\/wp-content\/uploads\/2024\/03\/Screenshot-2024-03-20-at-10.59.33\u202fPM-1-1024x688.png 1024w, https:\/\/kuvera.in\/blog\/wp-content\/uploads\/2024\/03\/Screenshot-2024-03-20-at-10.59.33\u202fPM-1-768x516.png 768w, https:\/\/kuvera.in\/blog\/wp-content\/uploads\/2024\/03\/Screenshot-2024-03-20-at-10.59.33\u202fPM-1-96x66.png 96w, https:\/\/kuvera.in\/blog\/wp-content\/uploads\/2024\/03\/Screenshot-2024-03-20-at-10.59.33\u202fPM-1-150x101.png 150w, https:\/\/kuvera.in\/blog\/wp-content\/uploads\/2024\/03\/Screenshot-2024-03-20-at-10.59.33\u202fPM-1.png 1048w\" sizes=\"(max-width: 500px) 100vw, 500px\" \/><\/p>\n<p>&nbsp;<\/p>\n<ul>\n<li><b>Indian Equity Large-Cap Funds\u00a0<\/b><\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n<p><span style=\"font-weight: 400;\">These funds had a tough time in the first half of 2023. Even though the S&amp;P BSE 100 went up by 7.1% during this time,<\/span><strong> ~58% of the managers of large active funds couldn&#8217;t do better than this benchmark <\/strong>on a YTD basis.<\/p>\n<p>&nbsp;<\/p>\n<p><span style=\"font-weight: 400;\">This trend of underperformance persists over longer durations, <\/span><span style=\"font-weight: 400;\">with 86.2% and 92.9% of active managers underperforming over 3Y and 5Y periods, respectively.\u00a0<\/span><\/p>\n<p>&nbsp;<\/p>\n<ul>\n<li><b>Indian Equity Linked Savings Scheme (ELSS) Funds\u00a0<\/b><\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n<p><span style=\"font-weight: 400;\">The S&amp;P BSE 200 was up 6.2% in the first six months of 2023, and just 17.5% of Indian ELSS funds underperformed the index. That doesn\u2019t sound like a lot right?\u00a0<\/span><\/p>\n<p>&nbsp;<\/p>\n<p><span style=\"font-weight: 400;\">But over the longer term, the underperformance rate rose, <strong>with 66.7% of funds underperforming the benchmark<\/strong> over the 10 years.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">\u00a0<\/span><\/p>\n<ul>\n<li><b>Indian Equity Mid-\/Small-Cap Funds<\/b><b>\u00a0<\/b><\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n<p><span style=\"font-weight: 400;\">The benchmark for Indian Equity Mid-\/Small-Cap funds, the S&amp;P BSE 400 MidSmallCap Index, rose 12.4% in H1 2023, and <\/span><span style=\"font-weight: 400;\">45.3% of active managers underperformed the index over that period (YTD).<\/span><\/p>\n<p>&nbsp;<\/p>\n<ul>\n<li><b>Indian Government Bond Funds<\/b><\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n<p><span style=\"font-weight: 400;\">The S&amp;P BSE India Government Bond Index rose 4.7% in the first half of 2023. Active management in this category also struggled to beat the benchmarks<\/span><b>, <\/b><span style=\"font-weight: 400;\">with an 85.2% underperformance rate (YTD basis).\u00a0<\/span><\/p>\n<p>&nbsp;<\/p>\n<p><span style=\"font-weight: 400;\">Although the rate of underperformance decreased over the three- and five-year horizons to 75.0% and 66.7%, respectively, the <\/span><span style=\"font-weight: 400;\">majority of active managers still could not surpass the benchmark performance.<\/span><\/p>\n<p>&nbsp;<\/p>\n<ul>\n<li><b>Indian Composite Bond Funds\u00a0<\/b><\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n<p><span style=\"font-weight: 400;\">For the first half of 2023, the S&amp;P BSE India Bond Index rose 4.6%. The H1 2023 underperformance of Indian Composite Bond fund managers was the highest across all categories in the SPIVA India Scorecard, at 95.7% (YTD basis).\u00a0<\/span><\/p>\n<p>&nbsp;<\/p>\n<p><span style=\"font-weight: 400;\">In the Indian context, the broader trend indicates a prevalent challenge for active strategies to deliver superior results, especially over longer investment horizons and in a consistent manner.\u00a0<\/span><\/p>\n<p>&nbsp;<\/p>\n<h4><span class=\"ez-toc-section\" id=\"Is_it_the_same_in_the_US\"><\/span><b>Is it the same in the US?<\/b><span class=\"ez-toc-section-end\"><\/span><\/h4>\n<p><b>\u00a0<\/b><\/p>\n<p><span style=\"font-weight: 400;\">You can argue that this is because the Indian markets have been doing better than most of their global counterparts recently and hence the benchmark indices offer better returns in India.\u00a0<\/span><\/p>\n<p>&nbsp;<\/p>\n<p><span style=\"font-weight: 400;\">Let\u2019s look at the largest stock market in the world &#8211; the SPIVA year-end scorecard for the US;<\/span><\/p>\n<p>&nbsp;<\/p>\n<p><img loading=\"lazy\" class=\"alignnone wp-image-29426\" src=\"https:\/\/kuvera.in\/blog\/wp-content\/uploads\/2024\/03\/Screenshot-2024-03-28-at-1.31.31\u202fAM-300x188.png\" alt=\"\" width=\"500\" height=\"314\" srcset=\"https:\/\/kuvera.in\/blog\/wp-content\/uploads\/2024\/03\/Screenshot-2024-03-28-at-1.31.31\u202fAM-300x188.png 300w, https:\/\/kuvera.in\/blog\/wp-content\/uploads\/2024\/03\/Screenshot-2024-03-28-at-1.31.31\u202fAM-1024x643.png 1024w, https:\/\/kuvera.in\/blog\/wp-content\/uploads\/2024\/03\/Screenshot-2024-03-28-at-1.31.31\u202fAM-768x482.png 768w, https:\/\/kuvera.in\/blog\/wp-content\/uploads\/2024\/03\/Screenshot-2024-03-28-at-1.31.31\u202fAM-1536x964.png 1536w, https:\/\/kuvera.in\/blog\/wp-content\/uploads\/2024\/03\/Screenshot-2024-03-28-at-1.31.31\u202fAM-150x94.png 150w, https:\/\/kuvera.in\/blog\/wp-content\/uploads\/2024\/03\/Screenshot-2024-03-28-at-1.31.31\u202fAM.png 1682w\" sizes=\"(max-width: 500px) 100vw, 500px\" \/><\/p>\n<p>&nbsp;<\/p>\n<p><span style=\"font-weight: 400;\">Over the full year, a majority of actively managed funds underperformed their assigned benchmarks in most of the reported fund categories.\u00a0<\/span><\/p>\n<p>&nbsp;<\/p>\n<p><strong>In 2023, 60% of all active large-cap U.S. equity funds underperformed the S&amp;P 500.\u00a0<\/strong><\/p>\n<p>&nbsp;<\/p>\n<p><span style=\"font-weight: 400;\">Across all categories, underperformance rates typically rose as time horizons lengthened. <\/span><span style=\"font-weight: 400;\">At the one-year horizon, 6 of 22 equity categories and 8 of 17 fixed income categories saw majority outperformance, falling to just 1 equity category and 4 fixed income categories over five years. <\/span><span style=\"font-weight: 400;\">At the 15-year horizon in both asset classes, there were no categories in which the majority of active managers outperformed.<\/span><\/p>\n<p>&nbsp;<\/p>\n<p><img loading=\"lazy\" class=\"alignnone wp-image-29427\" src=\"https:\/\/kuvera.in\/blog\/wp-content\/uploads\/2024\/03\/Screenshot-2024-03-28-at-1.36.34\u202fAM-300x155.png\" alt=\"\" width=\"500\" height=\"258\" srcset=\"https:\/\/kuvera.in\/blog\/wp-content\/uploads\/2024\/03\/Screenshot-2024-03-28-at-1.36.34\u202fAM-300x155.png 300w, https:\/\/kuvera.in\/blog\/wp-content\/uploads\/2024\/03\/Screenshot-2024-03-28-at-1.36.34\u202fAM-1024x528.png 1024w, https:\/\/kuvera.in\/blog\/wp-content\/uploads\/2024\/03\/Screenshot-2024-03-28-at-1.36.34\u202fAM-768x396.png 768w, https:\/\/kuvera.in\/blog\/wp-content\/uploads\/2024\/03\/Screenshot-2024-03-28-at-1.36.34\u202fAM-1536x791.png 1536w, https:\/\/kuvera.in\/blog\/wp-content\/uploads\/2024\/03\/Screenshot-2024-03-28-at-1.36.34\u202fAM-150x77.png 150w, https:\/\/kuvera.in\/blog\/wp-content\/uploads\/2024\/03\/Screenshot-2024-03-28-at-1.36.34\u202fAM.png 1906w\" sizes=\"(max-width: 500px) 100vw, 500px\" \/><\/p>\n<p>&nbsp;<\/p>\n<p><span style=\"font-weight: 400;\">This report shows how the active funds are unable to consistently outperform the benchmarks in the US as well. It makes a strong case for passive investing, which is more about following the market as a whole and usually costs less, as a simpler and often better way to invest.<\/span><\/p>\n<p>&nbsp;<\/p>\n<p><span style=\"font-weight: 400;\">Data from the US market complements our earlier narrative on the Indian market, further supporting the argument for passive investing as a more predictable and often more cost-effective strategy for long-term wealth growth.\u00a0<\/span><\/p>\n<p>&nbsp;<\/p>\n<blockquote>\n<div class=\"quote-content\">&#8220;On average, the average large-stock fund manager produces average returns before fees and below-average returns after fees. So compared with after-fee returns, an index fund is superior.&#8221;<\/div>\n<div class=\"quote-content\"><em>Howard Marks<\/em><\/div>\n<div><\/div>\n<\/blockquote>\n<p>&nbsp;<\/p>\n<p>&nbsp;<\/p>\n<p><span style=\"font-weight: 400;\">Through a global lens, the evidence continues to suggest that passive investing stands as a formidable approach for those looking to participate in market gains without the added costs and uncertainties associated with active management.<\/span><\/p>\n<p>&nbsp;<\/p>\n<h4><span class=\"ez-toc-section\" id=\"Need_more_proof\"><\/span><b>Need more proof?\u00a0<\/b><span class=\"ez-toc-section-end\"><\/span><\/h4>\n<p>&nbsp;<\/p>\n<p><span style=\"font-weight: 400;\">However, it&#8217;s not just the data that points us in this direction; a vast expanse of academic research strengthens this argument against active investing&#8217;s ability to consistently beat the market.<\/span><\/p>\n<p>&nbsp;<\/p>\n<p><span style=\"font-weight: 400;\">The wisdom of Nobel laureates like Eugene Fama and Harry Markowitz, alongside the expertise of William Sharpe and Merton Miller, casts a long shadow over the active versus passive investing debate. These economists, whose contributions have deeply influenced our understanding of financial markets, warn against the folly of attempting to time the market in response to fluctuations in stock prices. Their collective voice offers a powerful caution: the endeavor to outperform the market through active management, such as trying to predict short-term market movements, is not just challenging but likely unwise.<\/span><\/p>\n<p>&nbsp;<\/p>\n<blockquote><p>\u201cThe question is when is active management good? The answer is never,\u201d<\/p>\n<p><em>Eugene Fama, Nobel laureate at the Morningstar ETF Conference in Chicago.<\/em><\/p><\/blockquote>\n<p>&nbsp;<\/p>\n<p><span style=\"font-weight: 400;\">Across various market environments and over multiple time horizons, a significant portion of active managers fail to outshine their benchmarks. This pattern of underperformance persists, from U.S. large-cap equity funds to Indian government bond funds, reinforcing the notion that achieving consistent value addition through active investment strategies is a daunting task.<\/span><\/p>\n<p>&nbsp;<\/p>\n<p><span style=\"font-weight: 400;\">So, you tell us, active investing or passive investing? Which one do you prefer now?\u00a0<\/span><\/p>\n<p>&nbsp;<\/p>\n<p><b>Sources\u00a0\u00a0<\/b><\/p>\n<p><a href=\"https:\/\/www.spglobal.com\/spdji\/en\/documents\/spiva\/spiva-india-scorecard-mid-year-2023.pdf\">S<span style=\"font-weight: 400;\">piva India Scorecard Mid Year 2023<\/span><\/a><\/p>\n<p><a href=\"https:\/\/www.spglobal.com\/spdji\/en\/documents\/spiva\/spiva-us-year-end-2023.pdf\"><span style=\"font-weight: 400;\">Spiva Persistence Scorecard US Year End 2023<\/span><\/a><\/p>\n<p>&nbsp;<\/p>\n<p><strong>Interested in how we think about the markets?<\/strong><\/p>\n<p>Read more:\u00a0<a href=\"https:\/\/kuvera.in\/blog\/in-investing-the-simplest-things-are-the-hardest\/\">Zen And The Art Of Investing<\/a><\/p>\n<p><strong>Watch here:<\/strong> ETFs or Index Funds<\/p>\n<div class=\"embed-container\">\n<div class=\"embed-container\"><iframe src=\"https:\/\/www.youtube.com\/embed\/5U7cGdkOZ0g?si=SeXJ10UQ-ZVO7zot\" frameborder=\"0\" allowfullscreen=\"allowfullscreen\"><\/iframe><\/div>\n<\/div>\n<div><\/div>\n<p>Start investing through a platform that brings goal planning and investing to your fingertips. Visit\u00a0<a href=\"https:\/\/www.youtube.com\/watch?v=R7g03UwJAT8&amp;utm_source=Blog&amp;utm_medium=Weekly+wrap+22nd+July\" target=\"_blank\" rel=\"noopener\">kuvera.in<\/a>\u00a0to discover Direct Plans and\u00a0<a href=\"https:\/\/kuvera.in\/explore\/fixed-deposit\/c\/all\">Fixed Deposits<\/a>\u00a0and start investing today.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>In investing, people often ask if active investing can do better than the market in a consistent manner. This question is at the heart of the debate between active funds vs passive funds, sparking many conversations, studies, and decisions by investors. &nbsp; In this article, we&#8217;ll explore the nuances of active and passive investing, the [&#8230;]<\/p>\n<p><a class=\"btn btn-secondary understrap-read-more-link\" href=\"https:\/\/kuvera.in\/blog\/active-vs-passive-approach-in-investing\/\">Read More&#8230;<\/a><\/p>\n","protected":false},"author":11,"featured_media":29430,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_mi_skip_tracking":false},"categories":[81],"tags":[509,1231,282,1232,220,36],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v20.6 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Active Vs Passive Approach in Investing<\/title>\n<meta name=\"description\" content=\"Can active investing beat the market? A look at what the data say in the Indian and global context. 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