High costs Fund managers are introducing exchange - traded funds into the Indian market , despite the fact that actively managed mutual funds still dominate in the country . One possible reason for this is the high performance of active large - cap stocks funds in the country , which have highly indexed offerings , returning 20 % over the last five years . By comparison the BSE 100 index has returned 12 % . Distributors of fund managers also have more incentive to sell mutual funds , due to the greater commissions they can reap thanks to the funds ' higher expense ratios .
Fund managers are introducing exchange - traded funds into the Indian market , despite the fact that actively managed mutual funds still dominate in the country . One possible reason for this is the high performance of active large - cap stocks funds in the country , which have highly indexed offerings , returning 20 % over the last five years . By comparison the BSE 100 index has returned 12 % . Distributors of fund managers also have more incentive to sell mutual funds , due to the greater commissions they can reap thanks to the funds ' higher expense ratios .