Hi Vicky78,
Thanks - happy to be part of the forum.
I saw a report at Rediff (
http://inhome.rediff.com/money/2007/dec/20perfin.htm) which basically mention same as what you suggest - i.e. active investing in India is better than Index investing.
However, I am not 100% convinced that Active investing is better than Index investing:
1. I don't think there is any fund that has consistently outperformed Nifty every year over 5 years.
2. The study doesn't include Nifty Bees but since Nifty Bees performance is same as Nifty - if you look at performance numbers, the Nifty bees performance is very comparable.
3. What is the guarantee that active fund performance would be same after the fund manager leave the fund and join another fund?
4. The risk adjusted returns of index funds is very close to those of active funds.
I personally feel that it is very difficult for any MF Manager to beat market on consistent basis year after year but I am willing to find out if there is a single MF that has yielded better return than Nifty over last five years every year on consistent basis.
I am actually surprised that why people even bother selecting individual stocks and mutual funds - just invest on index and let the market take care of your investment... isn't it better for hundreds of mutual fund managers to work for you (which is represented by index) rather than a single fund manager?
Regards.