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SEBI to bring new mutual fund regulations for passive funds

Published: 1st Jun, 2023

SEBI to bring new mutual fund regulations for passive funds

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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