Nithin Kamath, co-founder and chief executive officer (CEO), of stock broking platform Zerodha, warned investors looking for the best asset class or the best mutual fund that they are wasting their time and energy.
Kamath leaned on his over 20 years of experience in the stock market and advised picking low-cost equity, debt, and gold index funds.
In a post on social media platform X, Kamath said, “After 20+ years of being in the markets, one thing has become crystal clear to me: most investors should just invest in low-cost equity, debt, and gold index funds and do something useful with their lives. Trying to pick the “best fund” or “best asset class” is largely a waste of time and energy.”
According to Kamath, odds are stacked against such investors. He said that most investors would be able to earn far better returns by focusing on maximising their earning potential rather than obsessing over picking the best stocks or funds.
“There was a famous study from Fidelity that found that their best-performing accounts belonged to people who were either dead or had forgotten they had accounts. The study was made up, but the point still stands,” Kamath said.
Passive investing on the rise
The trend for passive investing has gained prominence over the years, with the passive funds in India seeing a strong growth momentum.
The overall assets under management (AUM) of passive funds reached ₹12.11 lakh crore as of May 2025, a 25% jump from ₹9.70 lakh crore recorded a year go. These funds now account for 16.78% of the total mutual fund AUM, which stands at ₹72.18 lakh crore, according to AMFI data.
Meanwhile, as of July 22, mutual funds launched 162 mutual funds of which around 106 were passive funds, whereas 56 were active funds.
Passive funds excel in efficient markets where stock-picking opportunities are limited. Their low costs provide an advantage, especially during rallies led by a few heavyweight stocks—making it tough for active managers to keep up amid stretched valuations and selective bets.
Disclaimer: This story is for educational purposes only. The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.