Akshay, Head Fund Management - Equity at Merisis, set the context for the discussion by emphasizing the importance of understanding global and domestic market trends before delving into specific investment products. The conversation began with a deep dive into the rapid rise of global passive investing.
Naresh, Head - Products and Investment Strategy at Merisis, shared data highlighting the structural shift toward passive funds globally. Between 2014 and 2025, the global asset management industry grew from approximately USD 74 trillion to USD 147 trillion, while assets in passive funds and ETFs surged over four times—from about USD 19 trillion to nearly USD 81 trillion. In parallel, the number of ETF products expanded dramatically, growing nearly ninefold between 2018 and 2025. This growth has been fueled not just by scale, but also by innovation, including factor-based investing strategies delivered through ETFs.
The discussion then moved to the Indian context, which is increasingly mirroring global trends. Over the last seven years, India’s mutual fund industry expanded from roughly ₹21 trillion to nearly ₹80 trillion. However, passive funds and ETFs grew far more rapidly—nearly 13x—rising from just over ₹1 trillion to approximately ₹13 trillion. The number of ETF products in India increased from around 60 to more than 260, with ETFs accounting for the majority of passive assets.
Beyond equity ETFs, the rise of commodity ETFs was highlighted, particularly gold and silver. Gold ETFs now account for over ₹1 lakh crore in assets, while silver ETFs—launched only in 2023—have already attracted close to ₹50,000 crore. This reflects growing investor interest in alternative asset classes, supported by silver’s dual role as both a store of value and an industrial metal, especially within EVs, semiconductors, and clean energy ecosystems.
Two key drivers behind the shift toward passive investing were identified. First, cost efficiency: passive funds typically operate at significantly lower expense ratios compared to active funds, directly enhancing investor returns over time. Second, the increasing difficulty active managers face in consistently beating benchmarks. While over 90% of active managers outperformed their benchmarks in 2018, this figure declined sharply to around 50% by 2021 and further to approximately 37% by 2024. As a result, investors are increasingly questioning the value proposition of active management and reallocating capital toward passive strategies.
The segment concluded by setting up the next discussion around multi-asset strategies. With recent periods of muted equity performance alongside strong returns from gold and silver, the relevance of diversified, multi-asset portfolios has gained prominence—providing the foundation for the subsequent conversation.