Smart beta funds are recently gaining traction for their ability to combine elements of both active and passive strategies. These funds, which track specific indices using a predetermined strategy, offer investors a middle ground between traditional active management and passive index investing.
Unlike conventional index funds that simply mirror the components of major indices like the Nifty 50 or Nifty 100, smart beta funds employ distinct criteria such as low volatility, quality metrics, momentum, and dividend yield to curate their portfolios.
This approach, while not entirely passive, also steers clear of the fully active management approach.
In a recent interview with CNBC-TV18, Swarup Mohanty, Vice Chairman & CEO at Mirae Asset Investment Managers, shed light on the growing market for smart beta funds.
Mohanty revealed that the market size currently hovers around ₹17,000-18,000 crore and is on a steady upward trajectory.
Highlighting the evolving landscape of investing in India, Mohanty stressed on the potential of smart beta strategies, especially as investors transition from the Alpha generation phase.
He expressed confidence that the growth of smart beta funds in India could outpace global trends, estimating that the current assets under management in this sector could double rapidly.
Watch this video for more.