Impact of Passive Investing on Actively Managed Mutual Funds

Abstract

The fast-growing popularity of passive investment, displayed in index funds and exchangetraded funds (ETFs), has radically reshaped the financial landscape even in the most recent times. It is therefore necessary for the situation to be analysed carefully because this development will undermine the conventional actively managed mutual funds. The objective of this article is to educate investors, fund managers, and legislators and thereby to compare the influence of passive investing on active mutual funds. This research review examines how the life and performance of actively managed mutual funds are influenced by passive investments. For us, it is important to present the convoluted ties between active and passive investment styles through exploring investors' preferences and market scenario. We would like to attract the attention of the investment community to the broader consequences too, allowing the participants to make the strategic choice based on the practical lessons