Bank Sector – Active Investing vs. Passive Investing

Over the last 1 year, Bank Bees has returned a negative 1.22% ROI. Dedicated Bank Sector Mutual funds on the other hand have done much worse save for ICICI Prudential Banking and Financial Services Reg. 

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UTI Banking Sector fund seems to have done far worse despite its current portfolio showing it having its top 3 investments to the tune of 66.84% in Private Sector Banks. 

Internationally there has been a lot of evidence of how in the long run passive investing by investing into low cost index funds is a much better compared to active investing. Unfortunately lack of ETF’s in India is a big limiting factor when one wants to invest beyond Nifty / Bank Nifty. 

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About Prashanth

Have been a full time participant in the stock markets since 1996. Run a Yahoo Group where focus is exclusively on discussions of the Indian Markets using Technical Analysis as the tool (groups.yahoo.com/group/technical-investor)
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2 Responses to Bank Sector – Active Investing vs. Passive Investing

  1. Anand says:

    I took a quick look at Money control to see the performance over 2,3,& 5 years. The pattern is very similar:- ICICI Prudential Banking and Financial Services Reg seems to be on par whereas the index (S&P Bank Nifty) has outperformed the other MFs marginally. May be this is a pattern across sectoral MFs

  2. Prashanth says:

    I too believe so, but the lack of ETF’s for other sectors mean that comparison can be only with Index which too is of recent genre for many.

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