> > In the absence of a democratized deep learning-driven fund open to consumer > investors, I think low cost, index funds are still the best option in most > parts of the world. I've heard it said that this is not the case in India, > and I don't know enough about the markets in India. We may disagree on the > value of Indexed funds. But I hope we don't disagree on the low cost part > (especially when investing for 20-30 year time horizons). >
Cost can only be justified by superior returns. In most of the developed world, managers don'tmake enough alpha to justify their existence, and index funds win. In India, Indexes suck in terms of construction, reach and capability, and fund managers are able to beat them easily. The time will come when India will have a decent ETF on NSE 200 or something, which is broad enough. Then, if the funds underperform that, I might change my mind :) Note that India has some of the lowest mutual funds charges in the world. Even actively managed funds, when used in "direct" mode, charge you about 1% a year or so, with no entry loads. The US Equivalent is between 4% to 6% for the first year and about 3% thereafter. Indian funds therefore have teh ability to beat benchmarks better - all they have get is 1% alpha.
