Investment Tips: If you want to take more profit at less cost, then invest in this fund

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Active vs Passive Funds: In the last few months, investors' interest has increased in passive mutual funds. It has less risk and gives better returns in the long term.

Investment Tips: If you invest in the stock market and want to invest in these directions, then Mutual Fund is the best way to do it. In this, your portfolio remains diversified, due to which the risk is also less. If you invest for the long term, the returns will be multi-fold. There are mainly two types of mutual funds. First active fund and second passive mutual fund. What is the difference between the two funds and what should investors do? You are being given complete information about this here.

Let us tell you that in an Active Mutual Fund, your money is managed by the fund manager. It is in the hands of the fund manager to invest money in which stock of which sector. On the other hand, passive funds track the market. It tracks an index like Nifty 50 or Sensex. In such a situation, when the market picks up, the NAV of the passive fund ie Net Asset Value increases. Let us tell you that the biggest feature of a passive fund is that it does not have a fund manager, so the cost is very low. Passive funds give high returns over the long term. Wealth can be created over a long period with the help of this fund. The diversification of this fund is very high, due to which the risk is low.

Interest in passive funds has increased

In the last few months, investor interest has increased more towards passive funds. This is indicated in the recent figures of AMFI. In passive funds, the manager does not have an active role, hence the cost is low due to low management fees. Experts say that the goal of an active fund is to get better returns than the market index. On the other hand, investors in passive funds expect returns according to the market index. This is the reason why passive funds have higher research expenses than active mutual funds, although they have lower costs than active ones. Active funds carry more risk than passive ones. In which more loss of money is expected.

Invest according to convenience

If you want to invest, then both have their own merits for this. It is right to make investment decisions according to the risk profile. Active funds carry a bit more risk, whereas passive funds have less risk and are also cheaper. In passive, the role of the fund manager is less, whereas in active funds, the risk is higher but better returns are possible than the benchmark index. Therefore, whenever you invest, invest only in that which has the least risk.