Is index investing better than active investing in India?

For large-cap funds, index investing has become increasingly popular as many active managers fail to beat the Nifty 50 consistently. However, in mid and small-cap segments, active managers often still generate significant alpha.

What is 'Alpha' in mutual funds?

Alpha is the excess return generated by a fund manager over and above the return of the benchmark index (like Nifty 50) after adjusting for risk.

How does the expense ratio affect my final corpus?

A 1% difference in annual fees might seem small, but over 25 years, it can reduce your final wealth by as much as 25-30% due to the loss of compounding on those fees.

Index vs Active Solver

Compare the long-term wealth impact of active fund alpha versus the low expense ratios of passive index funds.

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Quick Summary: Index vs Active Solver

The Index vs Active Solver helps you decide if an active fund's potential 'Alpha' (outperformance) justifies its higher Total Expense Ratio (TER). In many large-cap categories, active funds struggle to beat index funds after accounting for the 1-1.5% fee difference, making low-cost passive investing more efficient for long-term wealth creation.

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Regulatory Disclaimer

Last verified May 2026

Statutory Disclosure

Nature:Calculator platform and is NOT a SEBI-registered Investment Adviser. All calculations are indicative.

Risk:"Investments in securities market are subject to market risks. Read all related documents carefully before investing."

Consult a SEBI-registered IA or CA for personalised advice.

9 out of 10 traders in F&O incurred net losses (SEBI 2023). Tax estimates based on IT Act 2025. Trezoriq is not liable for financial decisions based on results.