Publication: Business Standard; Date: Aug 9, 2009; Section: Marketing & Investing
Why a well-managed and diversified fund will always beat a benchmark.
A lot has been written about index funds in the past two years, with most proponents recommending it as a key component in a portfolio. The overall argument being that most diversified equity funds are unable to beat the index, just as in the case of Western markets. The other point was that index funds were a low-cost alternative to exposure in the stock markets. On the other hand, most asset management companies prided themselves on their active stock picking skills and hence made a lot of noise with their performance statistics during bullish periods. Do index funds really do better than actively managed funds in India?