Angel One AMC CEO: Passive Funds are Retail Portfolio Core

• Angel One AMC CEO Hemen Bhatia advocates passive funds as a core strategy for retail investors due to their disciplined, cost-efficient, and risk-aware nature.
• Passive AUM in India has grown significantly, from ₹1.6 lakh crore in March 2020 to an estimated ₹13.3 lakh crore by October 2025, democratizing wealth creation.
• Investors should consider both qualitative factors (fund management expertise) and quantitative metrics (expense ratio, tracking error) when selecting passive funds.
• Bhatia suggests a "core-satellite" approach: passive funds form the core, complemented by active schemes for potential alpha generation.
• While beneficial, passive funds carry risks like concentration risk in thematic funds and systemic market risk, as they mirror benchmarks rather than outperform them.

Why It Matters: It highlights passive funds' role in democratizing wealth for retail investors.