Active vs Passive Mutual Funds: Which Should You Choose?
If you have ever looked into mutual fund investing, you have probably come across the terms 'active' and 'passive' funds and wondered which one makes more sense. The truth is, this decision is less about choosing the “better” option and more about choosing what fits your comfort level. Some prefer experts to call the shots, while others prefer a simple approach that follows the market index. Understanding this difference makes the choice much easier. Understanding Active Mutual Funds Active mutual funds are managed by professionals who regularly study markets, companies, and economic trends. These fund managers do not follow a fixed list of stocks. Instead, they make decisions based on what they believe will perform better in the future. This approach is widely used across mutual funds in India , especially by investors who prefer expert involvement. Many people like knowing that someone experienced is tracking their investments and making changes when needed. Active...