Thursday, April 22, 2010

Inclination Towards Passively Managed Funds

Index funds and Exchange Traded Funds (ETF) have become attractive in the eyes of the mutual fund investors owing to many mutual funds lagging benchmarks. I expect a spurt in passively managed funds as they are less expensive and less complex to understand.
ETFs have a lot of scope to grow in India as they are a huge asset class globally. This is reiterated by the fact that many large fund houses are aiming to launch ETFs like Motilal Oswal, Reliance MF, Benchmark MF, Deutsche, etc.
Post the market crash I have observed that despite of entrusting investments with professional fund managers a lot of retail investors have lost their money. According to rough estimates, only 17 per cent funds globally outperform the indices. Hence, passively managed funds would gain importance and mileage in the event of the MF platform of BSE and NSE becoming active. Currently, although these platforms exist, the number of trades is quite small.

Wednesday, April 7, 2010

Building the next-generation business leader

Garth Saloner, dean of Stanford University’s Graduate School of Business, discusses the challenge business schools face in educating students for a new world of companies without borders.