Passive investing transforms into a mainstream wealth creation strategy in India, indicating significant market trends.
Passive investing has emerged as one of the most significant developments in the modern financial system. The increasing awareness among investors regarding cost efficiency, transparency, diversification, and benchmark-linked performance has contributed to the rapid expansion of passive investment products across the world. In India, passive funds including Index Funds, Exchange Traded Funds (ETFs), and Fund of Funds (FoFs) have witnessed remarkable growth in assets under management (AUM) and investor participation during the last decade. This article examines the growth, structure, categories, and investment potential of passive funds with specific emphasis on the Indian market. The study relies on secondary data extracted from the Tata Passive Fund Brochure (2026) and industry statistics related to passive investing. The paper analyses global trends, Indian market expansion, historical growth in index funds and ETFs, and the role of passive investment strategies in portfolio diversification. The findings indicate that passive investing is gradually transforming from a niche investment avenue into a mainstream wealth creation strategy. The article further highlights the benefits and limitations of passive investing and discusses its future prospects in the Indian financial ecosystem.
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Nathan et al. (2026) studied this question.
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