Published: 1st Jun, 2023
Context
The Securities and Exchange Board of India (SEBI) is planning to bring new mutual fund regulations for passive funds.
About Passive Fund:
- A passive fund is an investment vehiclethat tracks a market index, or a specific market segment, to determine what to invest in.
- Unlike with an active fund, the fund manager does not decide what securities the fund takes on.
- This normally makes passive funds cheaperto invest in than active funds, which require the fund manager to spend time researching and analysing opportunities to invest in.
- Common type of passive funds are:
- Index Funds
- ETFs or Exchange-Traded Funds
- Fund of Funds
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