Bank Sector – Active Investing vs. Passive Investing
Over the last 1 year, Bank Bees has returned a negative 1.22% ROI. Dedicated Bank Sector Mutual funds on the other hand have done much worse save for ICICI Prudential Banking and Financial Services Reg.
UTI Banking Sector fund seems to have done far worse despite its current portfolio showing it having its top 3 investments to the tune of 66.84% in Private Sector Banks.
Internationally there has been a lot of evidence of how in the long run passive investing by investing into low cost index funds is a much better compared to active investing. Unfortunately lack of ETF’s in India is a big limiting factor when one wants to invest beyond Nifty / Bank Nifty.
I took a quick look at Money control to see the performance over 2,3,& 5 years. The pattern is very similar:- ICICI Prudential Banking and Financial Services Reg seems to be on par whereas the index (S&P Bank Nifty) has outperformed the other MFs marginally. May be this is a pattern across sectoral MFs
I too believe so, but the lack of ETF’s for other sectors mean that comparison can be only with Index which too is of recent genre for many.