Case for investing in passive funds becoming stronger

The recent regulatory changes have made it difficult for actively-managed large-cap funds to beat the benchmark consistently in the long-term

In his 2017 letter to shareholders, Warren Buffett summarised the results of a 10-year bet he had taken between 2008 and 2017. He had wagered that a low-cost index fund based on the S&P 500 would  beat the best of hedge funds. The other party in the bet was Protege Partners, which picked five fund-of-funds, which in turn had invested in the best hedge funds. Yet the hedge funds lost. The episode holds lessons for Indian investors, too, who have traditionally preferred active funds. 

Large-cap active funds may fail to beat benchmarks: According to the latest SPIVA India scorecard (it