Active and passive management are two different ways of managing portfolios. An active fund manager’s objective is to outperform the benchmark on a risk-adjusted basis, while a passive fund manager’s mandate is to replicate the portfolio and performance of the benchmark. With active funds underperforming, a lot of interest and assets under management are moving into passive funds. Index funds are the most popular type of passive funds. In India, the first index fund was offered in 2001 and since then index funds have come a long way. As of June 30, 2022, there were 94 index funds in India managing around $83,000 crores. Currently, 19 index funds track the Nifty 50 and invest in the same 50 companies as the index (same ratio).