MFs seek Sebi approval for passive funds to tap into flows from smaller PFs

Move to help them tap into provident fund flows; ETFs, index funds could corner higher AUM if the markets stay weak

Mutual fund (MF) players are seeking approval from the Securities and Exchange Board of India (Sebi) for a range of passively managed funds to tap into flows from smaller provident funds. Additionally, MF experts see such products gaining traction if broader markets continue to remain weak. 
 
“Smaller provident funds have also started investing in equity. Currently, they are showing a preference for passively managed funds,” said Kalpen Parekh, president of DSP Mutual Fund (MF). In August 2015, the Employees’ Provident Fund Organisation (EPFO) had started investing in equities through exchange-traded funds (ETFs). 
 
“Smaller provident funds are following the