Navi MF looks beyond passives, eyes active frontier to drive growth

Fund house plans to expand active equity offerings with focus on high active share as it seeks to diversify beyond passive funds and tap broader investor demand

Nearly five years after entering the mutual fund (MF) industry, Navi MF is stepping up its play in the active equity space, pivoting away from its strategy of focusing solely on low-cost passive products.

 

The fund house, according to chief executive officer (CEO) Aditya Mulki, in recent years expanded its fund management capabilities. And, it has worked to improve the performance of its active schemes, laying the 'groundwork' for a broader push in the segment.

 

Navi MF, which entered the industry in early 2021 through the acquisition of Essel MF, currently runs only two active equity schemes — Navi Flexi Cap Fund and Navi Large & Midcap Fund. Both of them were part of the Essel MF portfolio at the time of acquisition.

 

Over the past five years, the fund house has focused almost entirely on building out its passive lineup. It has launched schemes such as the Navi Nifty 50 Index Fund, Navi Nifty Next 50 Index Fund, Navi Nifty Bank Index Fund, and Navi Nifty Midcap 150 Index Fund, among others. 

Passive schemes account for the bulk of its assets under management (AUM). Its largest scheme currently is its Nifty 50 Index Fund, with an AUM of about ₹3,936 crore. The fund house’s overall AUM has grown from around ₹700 crore at the time of acquisition to around ₹9,200 crore as of February 2026. 

While passive funds have seen strong growth in the post-Covid period, active schemes continue to attract the bulk of inflows, with investors continuing to prefer top-performing funds in each of the categories.

 

In addition, active funds dominate the distributor channel, as they offer relatively higher commissions, making them more attractive for intermediaries.

 

According to Mulki, the decision to revive the active business is a natural extension. “Different investors have different needs — while some prefer low-cost beta through passive funds, others look for alpha opportunities. Our role is to offer both, rather than take a view on one over the other,” he said. 

Fund houses, the CEO added, will take the riskier route to stand out in the crowded and highly-competitive equity MF space. 

“Our focus is on maintaining a high active share, ensuring that our active funds are meaningfully differentiated from benchmarks. At the same time, we follow a diversified portfolio approach, which helps balance return potential with risk management,” he added.