Active vs. Passive Multi-Asset Funds: Which Delivers More for Investors?

• Active multi-asset funds offer managers discretion for tactical calls, while passive funds track indices/ETFs with predefined weights.
• Passive funds have lower expense ratios (0.83%) compared to active funds (1.86%), but the cost difference narrows when underlying ETF expenses are factored in.
• Active funds consistently outperformed passive FoFs over 1, 3, and 5 years, showing significantly higher excess returns against benchmarks.
• S Naren's investment in a passive fund highlights asset allocation discipline, not a rejection of active management.
• Investors should prioritize return potential, risk-adjusted performance, and flexibility over minor cost differences when choosing funds.

Why It Matters: Active multi-asset funds offer higher return potential and flexibility, outweighing slightly higher costs for investors.