I have been investing in Mutual Fund for the last 8 years and thus I have tried a lot of things at one point in time my portfolio had around 25 mutual funds (yes I know, over-diversification). I was trying to get the best out of all and thus was investing in every good mutual fund be it a large-cap, small-cap or mid-cap i.e. investing left and right. But from the last 2 years, I have been managing my portfolio and thus trying to get rid of extra mutual funds.
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If you have invested in Mutual Funds, you know there are mostly two types of funds, active as well as a passive mutual funds. Inactive mutual fund there is a fund manager who actively manages the fund which means it requires a hands-on approach to investing whereas passive investing involves very less buying or selling, thus these types of mutual funds are just ETFs. And if we talk about History, passive mutual funds have fetched more money than the active mutual funds though there were some exceptions mostly passive funds were beating the active funds in terms of returns.
The goal of active mutual funds is to beat the market to get more returns but only a few active funds were able to do that and thus most people were not able to get the return that they suppose to get. Also since the passive mutual funds don't require much of an active fund manager, the expense ratio seems to be on the lower side and that makes it one of the reasons if giving good returns.
So for me it makes sense to just have only passive funds and do not have to think about how the managers are doing, because I know these passive funds will give me the returns as per the market conditions and thus even if 10% mutual funds beat this passive fund, I am ok because what if I have not invested in that 10% so it's better to have passive funds rather than having an active fund and change every time.
So the Funds I am currently invested in are ICICI Prudential Nifty Next 50 Index Fund, Navi Nifty 50 Index Fund, Motilal Oswal Nifty 500 Fund and Kotak Savings Fund.
With all these Index funds, I am actually targeting all the sectors and not diversifying them. Currently, my portfolio is at 60% Equity and 40% debt which means I am just trying to keep the equity portion less now so that my risk appetite is met.
Also, this is just my Retirement goal portfolio and thus I have other 2 goals and have different portfolios, so yes my retirement goal mutual fund portfolio now only has passive funds.
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I was actually not aware of the debt mutual funds, it look better choice then FD.
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Yes, it looks better choice but again from the last 2 years, the returns seem to have reduced a lot. So yeah it is a better choice than FD because we do not have to pay 30% tax like we have to pay in FD if we are in the top bracket.
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I don’t know, I didn’t deal with such funds, but I dealt with other sources of passive income. I can't say that passive income can compare with the profitability of active operations, I almost completely with rare exceptions, he abandoned sources of passive income even in the Hive Engine.
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Ok, these are not passive income... these are active shares themselves but passively managed...
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How complicated and confusing)
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