ICICI MF recently filed for an ETF that will track the Nifty Alpha Low-Volatility 30 Index. It is part of the suite of smart-beta indices with the NSE, with the portfolio designed using a combination of two factors.
The recent evolution in the passive space has given rise to a new category of funds promising to deliver "active" returns through a structured passive approach. These are often referred to as smart beta or factor-based index funds, and they represent a compelling middle ground for investors.
Dwaipayan Bose explains what momentum investing is, how it works, why it generates higher returns and has higher wealth creation potential.
Passive funds appeal to investors seeking to avoid the risk of underperformance by the fund manager and minimise the need for frequent chopping and changing of funds.
The factor fund launch spree by mutual funds (MFs) is moving from the passive to the active space. Two new fund offerings (NFOs) - ICICI Pru Active Momentum Fund and Bandhan Multi-Factor Fund - are currently open for subscription. Sundaram MF's multi-factor fund NFO closed this Wednesday.
Dwaipayan Bose on how index funds play a key role in the diversification of portfolios and help manage risks
Among index funds, the most popular products are funds tracking the Nifty 50 and Sensex, says Dwaipayan Bose, and explains the finer points of selecting the right index mutual fund.
'No human bias is involved as happens in active funds.'
Investors should use a mix of active and passive funds.
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