61% investors invested in at least one passive fund and its AUM grew 8.5x in 5 years as per a MOSL report.
In conversation with Motilal Oswal AMC's Pratik Oswal, Germinate Investor Services' Santosh Joseph, and Invest Aaj For Kal's Anant Ladha.
In conversation with Motilal Oswal AMC's Pratik Oswal, Germinate Investor Services' Santosh Joseph, and Invest Aaj For Kal's Anant Ladha.
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NewsTranscript
00:00 Hi, thanks so much for tuning in.
00:01 You're watching BQ Prime.
00:03 This is the Mutual Fund Show, and my name is Alex Mathew.
00:06 This conversation is set up to talk about passive investing,
00:11 and specifically with regard to equity.
00:13 Now, it's only been a few years that we've
00:16 seen the growth of passive investing in India
00:18 with regard to mutual funds, and it's already
00:21 grown in a very big way.
00:22 Part of that has to do with the fund flows from the pension
00:26 fund into passive.
00:28 But there's also a lot of adoption
00:30 from investors like yourself.
00:32 We're going to talk about how far that has come,
00:35 and then the second leg of the conversation
00:37 will talk about how you can incorporate
00:39 the various products that are currently available
00:42 and how they can fit the requirements that you have.
00:46 The first leg of the conversation
00:47 has to do with what the industry has done over the past few
00:51 years and what the implications of that are.
00:54 Joining me to talk about that is Pratik Oswal,
00:57 who is the head of passive funds at Motilal Oswal.
00:59 Pratik, thanks so much for taking the time.
01:03 Let's start with this, because I remember very distinctly,
01:06 we spoke just about 3 and 1/2, 4 years back.
01:09 We did a podcast that spoke about passive
01:11 as this new opportunity for investors to get into,
01:15 and it's come quite a while, quite a distance
01:17 from that point.
01:19 How would you describe that journey so far,
01:22 and where do we stand right now?
01:24 Yeah, hi, Alex.
01:26 Thanks for having me here.
01:29 Yeah, so I actually do remember a conversation
01:33 that we had 3 and 1/2 years ago, and I think we're still
01:38 somewhat in the same phase where I think one of the things
01:41 that we as an AMC and also a lot of other mutual fund houses
01:47 are still talking about awareness.
01:49 I think even though we've seen a lot of funds
01:51 flow into passive funds over the last five to seven years' time,
01:55 to give some numbers, the overall AM of passive funds
01:59 were about 20,000 crores in 2015 or 2016,
02:04 and that's grown to almost 7.6 lakh crores, which is now
02:08 approximately 17% to 18% of the overall mutual fund
02:12 AM from about 1.5%, 2%.
02:14 So not only has it grown in size,
02:16 it's also grown in market share.
02:18 And I think not only when people think about passive funds,
02:22 they think about NIFTY, Sensex, but we've
02:25 seen creation of new categories in this era
02:28 over the last five years.
02:29 You did not have fixed income passive funds five years ago.
02:33 That's a 1 lakh crore industry today.
02:35 You did not see much of commodities.
02:38 You have gold and silver ETFs.
02:40 You did not see international funds five years ago.
02:42 Now that's about 60,000, 70,000 crore in assets.
02:45 So I think what you see in the industry
02:47 is an explosion in a number of categories, number of funds,
02:50 and also in terms of the number of AM
02:53 that has come into the passive funds over the last five
02:55 years.
02:56 However, having said that, most of the AM that is coming in
02:59 is coming in through family offices, mostly institutional,
03:02 so from pension funds.
03:04 But increasingly over the last couple of years,
03:07 you are seeing a lot more interest coming in
03:09 from investors from all sides.
03:11 I think awareness is still the barrier,
03:15 but I do think that over time, we've seen less and less
03:17 of that problem.
03:18 One of the reasons why I wanted to have this conversation
03:21 with you is that you guys did an interesting study not too long
03:25 back where you asked a sample of investors
03:29 what their approach to investing is,
03:31 and that threw up a few very interesting results.
03:34 So what can you tell us about the headline from that?
03:38 One, more people are obviously aware of passive,
03:41 but why do they get into it?
03:43 To what extent do they get into it?
03:45 And what products do they choose?
03:47 Yeah, yeah.
03:48 So we actually did this very interesting survey,
03:50 and we keep on doing surveys to understand investor preferences
03:55 and how they change over time.
03:57 We obviously want to be more customer-centric.
04:00 And what's really interesting is that we did this survey
04:03 towards the start of the year, which
04:05 we ran for about four months.
04:08 We had about 3,000 to 4,000 responses in that survey.
04:11 And what is interesting is that--
04:13 and these are targeted towards mutual fund investors,
04:16 not only from our AMC, but from across the industry.
04:19 And what we saw was there is a lot more--
04:22 the awareness, which was lacking when we had the podcast
04:27 three years ago, is currently a lot more than it used to be.
04:31 So approximately 60% plus of the participants
04:35 said that they've invested in at least one passive fund.
04:38 And most of them are looking at increasing their allocation
04:40 towards passive funds going forward.
04:42 Not only that, there are obviously
04:44 categories like factor funds, where people are now
04:47 slowly being aware of.
04:48 And also, most people in this segment
04:52 are looking to increase their allocation towards passive
04:54 funds over the next 12 months.
04:56 So I think the good thing is that majority
04:58 of the investor base, at least the investor base that we saw
05:01 in also overall, from the end investors' point of view,
05:04 passive funds are making the cut today from a retail perspective.
05:09 And people are looking at it from a much stronger lens.
05:12 I think what has driven demand towards passive funds
05:18 from investors' perspective, there
05:19 are three main reasons why I think
05:22 what investors have said in the survey.
05:25 Number one is low cost.
05:27 I think passive funds are popular because more
05:29 of your money is invested in the underlying funds
05:31 because the expense ratio tends to be much lower.
05:34 So low cost is the number one reason.
05:35 And apart from that, also simplicity and market
05:38 returns is something which is also
05:40 equally-- almost as important as low cost.
05:43 So I think what we've seen in passive funds--
05:45 and we have a host of passive funds today.
05:48 There are about 170, 180 XFunds ETFs launched.
05:51 But what we've seen is that the simpler products
05:53 are getting most of the AUMs.
05:55 So I think simplicity and also low cost
05:56 is one of the main reasons to why
05:58 we're seeing so much interest in index funds, ETFs,
06:01 at least from the last couple of years.
06:02 I think you also asked about the ideal time frame
06:05 that people intend to hold these for.
06:08 I'm curious about the responses that you got there.
06:10 Yeah, exactly.
06:11 So what's-- and this is actually a very important thing
06:15 because usually a lot of people tend
06:18 to have trading strategies when they're buying Bank Nifty
06:22 or selling Nifty.
06:24 But I think in our survey, what was really sort of inspired--
06:27 the good stuff is that most of our respondents
06:32 were actually looking from a three-year-plus perspective.
06:34 So I think a lot of people looking at passive funds,
06:37 not from a trading mindset, but from an investing mindset,
06:39 which I think is an excellent choice.
06:42 And also number two is three out of four respondents
06:45 were actually looking at playing this space by SIPs, which
06:50 again is great because SIPs are great for long-term wealth
06:52 creation.
06:53 You don't have to worry about time in the markets
06:54 and all of that.
06:55 So I think the combination of the fact
06:57 that most people are looking at it from an investing lens,
06:59 plus that people are looking at it from an SIP lens
07:03 is actually a great way--
07:05 it's quite encouraging the way people are using passive funds.
07:08 My final point to you or my question to you
07:12 is about the products that are currently available
07:16 and that are in the works.
07:19 Some of your peers or some of your soon-to-be peers
07:22 intend to be primarily passive-oriented.
07:25 So that would entail, I think, a lot more products in this space.
07:29 And you mentioned at the start that people gravitate
07:32 to a few funds or fund types because
07:36 of the simplicity of it.
07:38 But there's a lot more that you can get in terms of nuance.
07:41 And if you look at, say, the US, where
07:43 you see more than 50% of investments or AUM in passive,
07:48 there are a lot of strategies that
07:49 are available that are not currently in play here.
07:53 What current strategies do you think
07:55 are interesting to talk about?
07:58 Yeah.
07:58 So looking at the US, we also feel
08:05 that simpler products will get the majority of the AUM.
08:10 If you think about an index fund,
08:11 the first thing that comes to most people's minds
08:14 is the S&P 500 fund, which is very popular in the US.
08:17 I think three out of four of the largest funds in the world
08:20 are S&P 500 index funds.
08:22 So that's how popular that fund is.
08:24 And I think even though, obviously,
08:28 majority of the AUM is there, just the size of the market
08:30 is big enough so that there are many other billion-dollar-plus
08:34 funds in the marketplace.
08:35 So I think the way I think most AMCs, including us,
08:39 look at passive funds is number one
08:41 is building blocks for asset allocation,
08:43 and second is categories.
08:45 I think most people think of index funds, ETFs,
08:48 as Sensex and Nifty.
08:50 But actually, you can have an unlimited amount
08:53 of passive funds.
08:54 Most of these big AMCs in the US have hundreds of index fund
08:58 ETFs under their umbrella.
09:00 And we'll probably see similar trends coming to India
09:03 over the next 5 to 10 years' time.
09:07 I also agree that the whole idea about passive is to be simple.
09:11 But as an industry, we tend to overcomplicate a lot of things.
09:15 So there's a lot of factor funds and mid-cap funds
09:19 and small-cap funds and multi-cap funds
09:21 and micro-cap funds.
09:22 So I think in terms of choice, there
09:23 is a lot more choice than it was five years ago.
09:26 And as an investor, I think the idea
09:29 is that you're catering to different types of investors.
09:32 You're catering to a sophisticated investor,
09:34 retail investor, someone who's looking for a different type
09:37 of risk profile.
09:38 So I think because you're catering
09:41 to a varied set of investors, I think
09:45 this category-based approach is something that will probably
09:47 stand out in India.
09:49 Having said that, most of the AUM
09:51 should still be in those simpler products, large caps,
09:56 multi-caps funds or your fixed income or gold funds,
10:02 where the majority of the money tends to go.
10:04 Absolutely.
10:04 All right.
10:04 So that sets the context, I think,
10:06 perfectly for the second leg of this conversation.
10:08 Prateek, thank you so much for joining
10:10 and for taking the time and for setting the platform for us.
10:14 Now, you kind of understood how far the passive journey has
10:20 gone for the Indian mutual fund industry.
10:23 But what does this mean for you, the investor?
10:26 How should you incorporate these strategies
10:28 into your own portfolio?
10:30 To talk about this, I have two guests joining in.
10:34 We've got Santosh Joseph, who is the founder of Germinate
10:38 Investor, and Anant Ladda, who is the founder of InvestAaj
10:42 for Current.
10:43 Thank you so much, gentlemen, for taking the time.
10:45 And you were listening to the first part of the conversation,
10:49 where we kind of set the context and said,
10:52 look, this segment of the industry
10:54 has grown quite significantly.
10:56 But how does one look at passive to incorporate it?
10:59 It's not necessarily something that
11:01 should replace active completely.
11:03 And I think we've spoken about that in the past as well.
11:07 How would you use it in combination?
11:09 I'll start with you, Santosh.
11:12 So essentially, when one looks at the difference
11:15 between the active and the passive,
11:17 I think clearly it's the ease for the investors.
11:19 Now, today we've grown with a new clutch of investors,
11:22 where we've gone from DIY, do it yourself, to serve yourself.
11:26 Now, this product comes in handy for people
11:30 who like to be invested in equity,
11:32 and at some level are a little hesitant to make a decision
11:37 about should I go for active or passive,
11:40 but still want to get their feet wet.
11:41 Now, this is a great way to start off.
11:43 So therefore, you don't have to really worry about should I
11:46 do it or not do it.
11:47 You have an option is do both if you can.
11:49 Eventually, you will graduate to either go full on active
11:54 or you'll be happy with passive.
11:56 Interesting.
11:57 Anant, I'll come to you on the choice of product
12:00 here, because like anything else in the investing space,
12:04 you have to choose what fits the bill for you.
12:07 And I think a lot of people gravitate
12:09 when they're starting to the large cap funds,
12:11 but there are several options across the spectrum.
12:14 So how do you choose?
12:15 See, I personally feel that index funds are
12:19 perfect for no-nothing investors who
12:20 don't want to take anyone's help,
12:22 be it RIAs or be it mutual fund distributors.
12:25 For example, if you want to invest in US market
12:28 and you are not having much knowledge about US market,
12:32 then probably index fund is a better option
12:34 which you have to invest your money.
12:36 If we talk about India, I feel right now we still
12:39 have a lot of scope in mid-cap and small-cap space
12:42 where active funds will probably outperform for near future,
12:45 which we can see.
12:47 So for me, index fund in India is mainly focused
12:51 towards the large-cap space.
12:53 Maybe I am more attracted towards Nifty 50 equal weight
12:57 funds because I feel that equally dividing your corpus
13:01 in 50 stock is something which is making more sense to me.
13:04 Even data suggests so that whenever
13:07 we see five-year rolling return of any given time period,
13:11 Nifty 50 equal weight fund has delivered more than 6% returns,
13:15 which is kind of we can say that you have outperformed
13:19 or equally performed as compared to your FDs
13:22 even in worst of the times.
13:24 So this is one category which is attracting me the most
13:27 right now.
13:27 Other than that, especially in the mid-cap space
13:29 and the small-cap space, I am more
13:31 attracted towards the mutual funds and active mutual funds.
13:36 OK.
13:36 Fair enough.
13:37 When it comes to the large-cap space,
13:39 so Santosh, it's an interesting conundrum, right?
13:42 We had in the first part of the conversation
13:44 as well talked about Sensex fund or a Nifty 50 fund.
13:49 Is that sufficient in the large-cap space?
13:52 Because I've also heard proponents of saying,
13:55 you should take Nifty 50, but you can also perhaps
13:58 take the Nifty Next 50 to kind of balance it out
14:01 and to have a reasonable allocation
14:04 towards that large-cap space.
14:06 So yeah, as you go down that path of choosing between Nifty
14:11 Equal 50 or the Nifty Next 50, I'll
14:14 just share some numbers for you.
14:15 When you take within the Nifty, the top 10 stocks in Nifty
14:19 alone constitute to 60% of Nifty.
14:22 Now, by 50 stocks being in Nifty, the top 10 should be 20%.
14:26 Whereas their weightages are 60%.
14:29 You see the skew.
14:31 Therefore, Equal Nifty 50 may give you a fair chance
14:35 because the top guy is close to 10% in the Nifty
14:38 and the bottom 50th guy is about half a percent.
14:41 You see the skew.
14:42 And hopefully, you're hoping that the guy at the bottom
14:44 also get a fair chance to perform to take Nifty forward.
14:47 Now, therefore, Equal Nifty 50 finds a little more merit
14:50 than just Nifty for the people who are happy not
14:52 to make a decision.
14:54 Now, I'd like to extrapolate the thought and say,
14:57 I like the Nifty 500.
14:59 It's a beautiful universe, the universe
15:01 in which most mutual funds operate,
15:03 active funds, not so active funds,
15:06 and even the passive funds.
15:08 When you take the breakup, 76% is large cap,
15:11 34% is mid and small cap.
15:12 There again, survival of the fittest.
15:14 That story plays out beautifully.
15:16 Again, this is for people who say, I don't need anybody.
15:20 I want to get my investment thesis into the equities,
15:24 but I do not know where.
15:25 Whether you play Equal Nifty 50, Next Nifty 50, or the Nifty 500,
15:29 you've got a beautiful--
15:30 I would root for a Nifty 500 if at all
15:33 you want to go for active funds against the choice
15:36 of a good active fund.
15:38 Oh, so Nifty 500 as opposed to--
15:40 so here's the thing.
15:42 I started this conversation with you, gentlemen,
15:44 to say that perhaps the best solution is
15:47 a combination of both worlds.
15:48 Because Anant has pointed out, and with due merit
15:52 to that statement, the mid cap and the large cap fund
15:56 managers have, in fact, managed to beat passives
15:59 to a large extent.
16:00 But you, Santosh, are saying that you would argue
16:02 or you would bat for a Nifty 500 index fund
16:06 against quite a few actively managed funds.
16:09 I will--
16:10 [INTERPOSING VOICES]
16:11 [LAUGHTER]
16:12 The reason is the numbers are stacked against you.
16:15 When you look at the universe of mid cap and small cap,
16:18 even an average fund manager will beat the index.
16:20 I think we're all agreeing on that.
16:23 Now, when you want to build a combination of large cap,
16:26 mid cap, small cap, it would be silly to say
16:28 that for large cap and some bit of component,
16:30 I'll do a passive.
16:31 And for small cap and mid cap, I'll do an active.
16:33 Then that's when Nifty 500 comes into play.
16:36 I am saying preferably play the active space.
16:39 If at all you're so stuck up about saying,
16:41 no, I'd like to play only passive,
16:43 then the 500 is a better choice.
16:44 So I think that's how I like to put it.
16:46 So that's a good qualification.
16:48 Now, having said that, Anant, you
16:52 pointed out in the mid cap and the large cap space.
16:55 Now, when somebody-- so assume that this
16:57 is a hypothetical scenario.
16:59 One of our viewers joining in has no knowledge of investing,
17:02 wants to keep it simple, cost is low,
17:05 and that is something that we've also established.
17:08 What would your first suggestion be?
17:10 You need to cut your teeth.
17:11 So therefore, I would think that a large cap Nifty 50,
17:14 like you pointed out, equal weight fund.
17:16 And then how do you want to nuance that?
17:19 What kind of split should you ideally have?
17:21 See, we should understand, firstly,
17:24 that whether it is investing or health matters,
17:27 everything is subjective.
17:29 We cannot have a single principle for everyone.
17:31 For example, I'll just give you a very practical example.
17:34 In US, it is recommended that you should not
17:38 consume a lot of ghee.
17:39 It is not good for your health in terms of US.
17:42 But when we come to India, we consume a lot of ghee.
17:45 And it is actually good for our health
17:47 because of the climatic condition
17:48 which we have in India.
17:49 In the same way, investing cannot be simple A, B, C.
17:54 It has to be subjective, depending
17:55 upon your own personal taste and your own personal mindset.
17:59 If you talk about the initial starting point
18:02 and you don't want to take anyone's advice or anyone's
18:05 help, I feel that DSP, Nifty 50, equal weight fund
18:08 is a decent fund, having a tracking error of 0.05%,
18:14 which is reasonable and a decent fund to start off.
18:18 And it can be a starting point.
18:20 If you want to invest in international market,
18:23 S&P 500 index fund, be it of Motlal Oswal or be it of HDFC,
18:27 it's a good starting point.
18:28 And this is where you can start your journey.
18:31 Eventually, I feel small cap space and mid cap space,
18:35 as I earlier also mentioned, you have a lot of scope
18:38 of outperforming the benchmark.
18:41 And you will eventually need to have
18:43 some knowledge about active funds
18:45 or hire a distributor or an RIA and take his help
18:50 and invest accordingly.
18:51 At the same time, especially after the new taxation rules
18:55 which has applied on debt funds, even balanced and balanced
18:58 advantage fund as a category has become very attractive
19:00 because there you are giving your fund manager the choice
19:03 to decide your allocation.
19:05 And you are trusting an expert.
19:07 So this is something you have to keep in mind.
19:09 But yeah--
19:09 Interesting.
19:10 So that was a conversation that we had not too long back
19:12 as well, but the hybrid makes sense.
19:15 But sticking to passive and passive equity, Santosh,
19:19 I think a lot of people get into this
19:21 with a fill it, shut it, forget it kind of mindset
19:24 where you're putting money on a consistent basis.
19:26 I think my first guest pointed out
19:28 that a lot of people are employing that SIP approach.
19:31 They put lump sums as well.
19:32 But there can be perils to this, especially in the passive side.
19:38 The argument, especially in the small cap and mid cap space,
19:42 is that the active manager can help you protect your downside
19:47 to a certain extent.
19:48 How important is that?
19:51 Well, to begin with that entire notion of fill it, shut it,
19:54 forget it is so good theoretically.
19:56 But unfortunately, most investors
19:58 go against their own principles of what they started out with.
20:01 Now, you asked the question, somebody
20:03 watching the program for the first time
20:05 and they do not know anything.
20:07 For some reason, let's believe that Nifty equal 50,
20:10 like what Anand said, was a great idea for them.
20:12 But what's going to happen is they
20:14 are going to be bogged down by the relative performance
20:17 of the other funds or the market in general that they see.
20:20 Then they will question their conviction
20:22 whether fill it, shut it, forget it was a great idea
20:25 because you will see another active fund generating
20:27 2% extra return.
20:29 And you feel that you made a mistake by being passive.
20:32 Because you also have to understand,
20:34 any strategy, whether active or passive,
20:36 the true test is in your holding period and the returns
20:39 post-holding period.
20:41 Now, in an active fund, you have at least the objective
20:45 that the fund manager will at least
20:47 try the best of his ability to avoid accidents or mistakes
20:51 in the portfolio, which you can't because Nifty
20:54 is a bunch of 50 stocks, whether equal weighted or not equal
20:56 weighted.
20:57 You pick the best and the worst in that group
20:59 because it's an index.
21:00 You have no choice about it.
21:01 In fact, if you did, then your tracking error
21:03 would go for a toss and then no need for you
21:05 to be in that kind of a category.
21:06 Therefore, if investors truly stuck
21:09 to their own internal mandates and conviction,
21:11 fill it, shut it, forget it will work.
21:13 There again, don't forget the time factor.
21:16 If you give it 10 years, then it'll
21:17 be very difficult for us to have this debate saying
21:19 passive is active because both will make money.
21:21 I think we are sure about that.
21:23 Question is, we do not have people
21:24 who have 10 months time frame.
21:26 April 1st to now, we've got a robust four, five months.
21:29 Everybody's asset allocation has gone for a toss
21:31 because now they're only talking about small cap and mid cap
21:33 funds.
21:33 Forget about index and passive.
21:35 That's a very good point.
21:37 And in fact, again, we've had this conversation
21:39 in the recent past about the outperformance of small cap.
21:43 And I was speaking to a few people just earlier today
21:46 about the fact that 20,000 crore or thereabouts
21:49 has flowed into small cap funds, actively managed small cap
21:53 funds in the year to date so far.
21:55 But again, that's a conversation for another day.
21:57 Let's talk about that tracking error.
21:59 Anant, you mentioned that tracking error.
22:01 When it comes to selecting a fund,
22:02 is this of paramount importance?
22:05 What else do you pay attention to?
22:09 Passive, I'm saying.
22:10 Yeah, tracking error is important,
22:13 but it is not the only criteria.
22:15 Main criteria when you choose a passive fund
22:17 is to choose the category where you want to invest.
22:19 Once you have decided the category,
22:21 you can choose any reasonable fund
22:23 with more than 500 crores of corpus,
22:25 a decent name which has a legacy to take care of,
22:31 and having tracking error of less than 0.07%,
22:36 it's good to go.
22:37 So you first need to decide on what you want to invest.
22:40 Then everything will be sorted.
22:42 Nothing to worry about.
22:43 Won't make much of a difference.
22:44 Santosh, what do you think?
22:45 So I think when people choose passive funds,
22:49 the first and foremost concern is cost.
22:52 They look at the expense ratio and choose the lowest one.
22:55 But that's not necessarily the best option
22:57 because you might make mistakes on the tracking side.
23:01 See, tracking is one mechanism to tell you
23:03 whether the mandate of the fund is being honored.
23:07 Now, in an active fund, you have a lot of measures
23:09 that you want to see in terms of weightages of the stock,
23:12 in terms of stock in, stock out, churn ratio.
23:14 Whereas in a passive fund, you're
23:17 looking at how the stocks are being replaced
23:21 or how the stocks are managed in line,
23:23 almost using like a plumb line for construction.
23:25 Use a plumb line over here to ensure
23:27 that the integrity of the fund for which you've
23:29 got it is managed.
23:30 Because in a passive, that is the only reason you come in,
23:32 that you're ensuring that the person in charge of the fund
23:34 is managing it.
23:35 Now, that can be measured through a tracking error,
23:37 seeing how quickly, how swiftly they are doing.
23:40 This changes.
23:41 But actually, if you think about it,
23:42 you come to a passive fund, tracking error shouldn't manage--
23:46 sorry, it shouldn't matter.
23:48 Therefore, if you can, between one or two funds,
23:51 choose the lesser of a tracking error, you're better off.
23:53 It's not that because you've got a slightly higher tracking
23:56 error, you'll underperform.
23:57 Because there, the underperformance is so small,
24:00 actually, you may not even figure out.
24:01 Yeah, you may not notice.
24:03 So it's a fair point.
24:04 Anant has already given us his thoughts
24:07 about which funds can be looked at.
24:09 Do you have a few names that you can suggest?
24:11 You've already talked about the Nifty 500.
24:13 So I've been always looking at, in the passive,
24:15 how guys are making their entire space interesting.
24:18 So my favorite, I think I always already told you,
24:21 is the Motilal Nifty 500.
24:23 I think that is a great start for people to begin with.
24:27 Because you don't miss out on the mid and small cap.
24:29 Even in the passive side, you begin that journey
24:32 by getting a full-blown exposure to the top 500
24:35 stocks in the country.
24:36 When you go down the order, I also
24:38 see that you've got the mid-cap 150, mid-cap 200 index.
24:42 You also got--
24:43 I think UTI has got a nice fund called the Momentum
24:45 30 in their top 200 index.
24:47 What they're saying is that they'll take the top 200 index,
24:50 but within that, I'll choose only the 30 stocks
24:52 to be in my portfolio.
24:53 Otherwise, I think my favorite within the Nifty space
24:57 would not be the Nifty equal 50 or 50.
24:59 I would go for the Nifty next 50.
25:01 Because you see, there's a constant fight
25:03 for who gets into Nifty.
25:04 And the fight is won by the guy who's the best.
25:08 So in Darwinism, the survivor of the fittest to enter into Nifty
25:11 will have to only enter there by two conditions.
25:14 One, he outperforms, or two, somebody in Nifty underperforms.
25:18 Fair point.
25:19 And I think that's a great end to this conversation.
25:23 Gentlemen, thank you so much for taking the time.
25:25 Pleasure speaking with you.
25:26 Viewers, I hope that this helped you.
25:27 Write to us, and we'll get your questions answered.
25:30 This is Vicky Prime.
25:32 Thank you so much.
25:34 Thanks, I mean, I've been following your work.
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