Interestingly, this time around in the midst of the market crash, it is the active funds that have done better. Investors putting money in actively-managed mutual fund (MF) schemes would have seen less wealth erosion than those who have switched to index-linked ‘passively’ managed schemes or even index ETFs. For example, more than 90% of the mid cap and large cap actively managed funds managed to do better than the index. In most cases, the returns were better by 8-10%, which would be a lot more than the cost advantage that passive funds offer. Of course, outperformance here means that the fall is less, but it is still an outperformance. In the past three months, the Sensex is down 35% and that has also taken its toll on the mid cap and small cap stocks. In a sense, this underlines that active funds still have a role to play, especially in peak volatility when the VIX goes through the roof and risk management becomes critical via targeted diversification.