Passive equity funds for savers

Indians cling fiercely to physical assets, bank deposits, and small-savings investments. These are deep-rooted behaviours that are tough to shake off. Recent household financial savings data from the RBI paints a startling picture: as of March 2023, a staggering 55% of financial assets held by Indian households were parked in bank deposits and other investments, including the Public Provident Fund. Other investments are a slew of schemes that the government offers. Similar to bank deposits, investors receive an assured interest on the capital invested in these schemes. While some of the traditional investments can be useful in accumulating capital, they are not sufficient for growing wealth. For wealth creation, one can embrace equity exposure. To that end, mutual funds may be an attractive choice. And for those new to investing, passive funds may be a good star

This article was originally published on March 20, 2024.