Passive Titans of India: The Top 10 Equity Indices by Fund Size 17Jul2025

 

Passive Titans of India: The Top 10 Equity Indices by Fund Size 17Jul2025

 

Follow @vrk100

 

 

(The views expressed here are for information purposes only and should not be construed as a recommendation or investment advice. While the author is a CFA Charterholder with nearly 25 years of experience in financial markets, this content is intended to share general insights and does not constitute financial guidance. Please consult your financial adviser before taking any investment decision. Safe to assume the author has a vested interest in stocks / investments discussed if any.)

 

 

 

The author is a data dog, likes to work with data instead of compelling narratives as practised by several market participants.

 

In a market flooded with narratives and opinions, this blog stands apart by grounding its insights in hard data. We're diving deep into the numbers that define India's passive equity landscape, offering a balanced perspective.

Within a vast pool of equity mutual funds in India, passive equity funds have carved out a niche, yet their distribution and dominance vary widely across different indices.

This blog aims to dissect these variations, providing a comprehensive analysis of the top passive equity indices by their AUM. We'll explore the concentration of assets, the influence of large institutional investors like the Employees' Provident Fund Organisation (EPFO) and the regulatory curbs shaping this sector.

For those who value data over stories, this exploration offers a factual, nuanced understanding of India's passive equity market. Let's delve into the numbers that tell the real story.

 

If data isn't your preference, you might want to skip this blog. 

 

 

2. The Big Picture

 

India’s mutual fund industry has seen remarkable growth, with total AUM or assets under management crossing Rs 74 lakh crore as of 30Jun2025, with active equity funds alone managing Rs 33.47 lakh crore (excluding equity portion of hybrid funds), as per data from mutual fund industry body AMFI. 

 

Of the total AUM of Rs 74.15 lakh crore, passive equity vehicles—comprising ETFs and index funds—hold around Rs 9.36 lakh crore, as per Rupee Vest data. There are a total of 104 unique equity benchmark indices upon which passive equity funds, both ETFs as well as index funds, are based. 

 

The total number of passive equity funds are 411 as at the end of Jun2025.  

 

Of the total passive, equity ETF assets are Rs 7.45 lakh crore dominating with 80 per cent of total passive; while equity index funds asset size is Rs 1.91 lakh crore with 20 per cent share (see table 1 below). 

 

Equity indices with less than Rs 2,000 crore AUM: 

 

There are 170 passive equity funds—both ETFs and index funds—that together manage the Re 29,556 crore in AUM spread across indices with less than Rs 2,000 crore assets locked in each equity index. 

 

The Rs 29,556 crore AUM is merely 3.2 per cent of the entire passive equity AUM — meaning over 96 per cent of passive AUM is concentrated in larger indices with more than Rs 2,000 crore AUM.
 

In other words, while a large number of funds exist in these niche or mid- and small-cap indices, their combined asset size is negligible compared to the major index funds and ETFs that dominate with over 96 per cent of the assets.

In practical terms: 

 

Out of the total 104 benchmark indices underlying passive equity funds, only a small handful have significant adoption. The rest—indices with less than Rs 2,000 crore in assets—collectively account for a very small sliver of the overall pie.

What does this reveal?

Passive investing in India is highly concentrated around a few big indices—mainly Nifty 50, Sensex, CPSE and Bharat‑22. Retail or niche-mandate indices have much lower traction, even though there are many of them.

This underlines a structural imbalance: most passive equity assets are locked in established, large-cap indices, while a wide array of other indices—despite being available for investment—hold minimal AUM individually or collectively.

 

Compare data: The blog is an update of earlier blog titled "India Passive Funds and Their Asset Size." 

 

To compare, the AUM of passive equity funds grew from Rs 6.65 lakh crore as of 31Mar2024 to Rs 9.36 lakh crore as on 30Jun2025, a growth of over 30 per cent in the past 15 months -- the growth is attributed to a combination of 13 per cent increase in Nifty 50 index and increased net inflows to passive funds during the period. 

 

Table 1: Big picture - India passive equity funds and their asset size:

 

 

3. India Top 10 Passive Equity Indices and Assets Size 

 

A peculiar feature of India's passive landscape is the heavy skew towards a few benchmark equity indices.  The passive fund size is heavily skewed toward the top 10 passive indices controlling more than 90 per cent, or Rs 8.46 lakh crore, of total passive AUM. 

 

As mentioned above, passive equity funds track 104 equity indices.  

 

The asset concentration is so massive, the top two equity indices account for 73 per cent of total passive AUM.  

 

This is mainly due to massive EPFO investments (see update 19Jun2025 with charts 51 to 55) in Nifty 50, Sensex, CPSE and Bharat 22 ETFs. 
 

 

Key Observations from Table 2 below:

1. Dominance of Nifty 50 Index:

AUM: Rs 4.56 lakh crore (48.8% of total passive AUM).

Total number of passive funds: 41
 

ETF vs Index Fund split:

ETFs: Rs 3.71 lakh crore (82%)

Index funds: Rs 0.85 lakh crore (18%)

Conclusion: This index dominates India's passive investing space and is the clear market leader in both ETF and index fund formats.

2. BSE Sensex:

AUM: Rs 2.27 lakh crore (24.2% of total passive)

Total number of passive funds: 22

 
Heavily ETF-focused (94.4% of AUM in ETFs).

Shows investor preference for ETFs in flagship indices, Nifty 50 and BSE Sensex.

3. Concentration in Two Indices

Nifty 50 and Sensex together account for Rs 6.83 lakh crore, which is 73 per cent of the total passive equity AUM. The rest eight indices make up only 17.5 per cent of the total.

 

4. Break-up of Passive Equity Assets by Fund Type:

 

Of the top 10 equity indices AUM of Rs 8.46 lakh crore, AUM of equity ETFs is Rs 7 lakh crore (number of ETFs 67), while that of index funds is Rs 1.46 lakh crore (84).

 

Table 2: India Top 10 Passive Equity Indices by Fund Size: 

 

(please click on the image to view better) 

 

 

4. Break-up of Passive by NSE / BSE / Foreign Indices

 

Who’s Running the Show: NSE vs BSE vs Foreign Indices:

a). NSE / Nifty indices collectively account for Rs 6.70 lakh crore (71.6 per cent of total) of passive equity AUM.

b). BSE indices oversee around Rs 2.50 lakh crore (26.7 per cent).

c). Foreign indices—like Nasdaq‑100—make up just under Rs 16,000 crore (just 1.7 per ent) of the mix. 

 

Despite the availability of international passive equity options, foreign indices represent just about 1.7 per cent of total passive equity AUM in India—making international investing far from mainstream. 

 

This low participation stems from multiple factors. Some of those are:

1. Strong home bias among Indian investors (not unique to India):

Both retail and institutional investors overwhelmingly favor domestic assets. 

2. RBI- and SEBI-imposed restrictions on overseas MF investments:

The RBI and SEBI currently limit mutual fund investments in overseas equity securities to USD 7 billion industry-wide; and further caps overseas ETF investments to USD 1 billion industry-wide. 

3. Regulatory bottlenecks and lack of fresh inflows:

With both the overall overseas equity and overseas ETF limits hit, fund houses have stopped accepting new investments into international schemes unless redemptions free up space. 

Fund houses have appealed repeatedly to RBI to raise limits, but there is no clarity on easing the restrictions. India's Finance Ministry too maintains a stony silence on this. 

As a result, passive investments in foreign indices remain negligible in India—despite global market appeal, the structure simply doesn't support meaningful scale.

 

Table 3: Break-up of passive equity indices by NSE / BSE / Foreign Indices:

 

 

 5. India Top 10 Passive Equity Funds by Assets:

 

As has been highlighted by the author repeatedly over the years, India's passive landscape is heavily tilted: the top 10 passive equity funds command two-thirds of all passive equity assets under management. 
 

As stated in Section 3 above, their dominance is not random but heavily driven by large EPFO investments in just four ETFs tracking Nifty 50, Sensex, CPSE and Bharat 22.

 

Out of the total, six passive funds based on Nifty 50 have assets of Rs 3.97 lakh crore (63 per cent of total), three funds based on Sensex have assets worth Rs 1.93 lakh crore (31 per cent) and one CPSE ETF accounts for Rs 0.36 lakh crore (6 per cent) of assets.

 

Of these top ten funds, eight are ETFs holding around 93 per cent of the total AUM, while just two index funds make up the remaining 7 per cent. 

 

Table 4: India Top 10 passive equity funds by assets: 

 

 6. Finally

 

India's flagship equity indices, Nifty 50 and Sensex dominate the passive equity landscape in India—nearly three-quarters of the total passive assets are tied to these large-cap benchmarks.

Mid-, small-cap and smart‑beta indices (like Nifty 50, Midcap, Smallcap, Momentum) are gaining traction but still represent a relatively smaller slice.

India’s passive equity fund universe is rapidly scaling up, but it’s still heavily skewed toward large-cap tracking. While indices like Nifty Next‑50 or mid-, and small‑cap options are gradually climbing the ladder, the majority of the pie remains with Nifty 50 and Sensex-linked strategies. 

 

For investors, this signals both opportunity and imbalance—there’s room to diversify beyond top 50 heavyweights.

 

7. Action button

 

So, having discussed the passive equity landscape thoroughly, what are the investment implications?

 

Portfolio diversification is a key pillar of investing. India's passive equity landscape is still evolving.

 

Even though passive equity landscape is uneven, investors can explore a variety of indices to start with. Those new to investing can opt for safer alternatives like passive funds based on Nifty 50 and Sensex, depending on your risk appetite, asset allocation, personal situation and return expectations.

 

A succinct action plan for investors:

 

> Core part: A large part of your surplus money can be invested in passive funds based on Nifty 50 and Sensex, as India is expected to post reasonable growth rates of 6 to 8 per cent over the next five to 10 years

 

> Satellite part: Complement the core with a few index funds or ETFs that track Nifty Next 50 or Nifty Midcap 150 to capture broader domestic market participation

> Play money: Just for learning experience and get a grip on market psychology, a very small portion of your surplus money can be invested in the so-called smart-beta indices after thoroughly doing your own due diligence

 

> It may be mentioned, despite claims to the contrary by index providers, "smart-beta" passive funds

 

> Smart-beta funds still have higher expense ratios, low to medium volumes (for ETFs) and moderate investor interest 

 

> Some smart beta indices gaining traction in recent years are:

 

-- Nifty 200 Momentum 30 Index

-- Nifty 100 Low Volatility 30

-- Nifty Alpha Low Volatility 30 

 

> As you know, passive funds based on 'momentum' indices are prone to greater volatility and higher risk of losing money

 

> Global flavour: Regulators permitting, you could add a few passive funds based on foreign indices for international diversification and see how things go

 

> Most of the sectoral / thematic funds are not suitable for a large majority of investors; as such, these categories should be on your highly-avoidable list 

 

> If you are looking for equity ETFs, make ensure to do your homework on liquidity, bid-ask spread, high ETF volumes and reasonable asset size

 

> Stay disciplined with rebalancing: Regularly assess and rebalance your allocations to maintain your strategy mix; you could broadly aim for 50–75 per cent large-cap, 10–20 per cent mid-cap, 5 per cent global, and 5 per cent play money

 

> The asset mix presented here is merely a heuristic — not set in stone; you should determine your own mix based on the various factors discussed elsewhere

 

 

In this regard, you may be guided by the following list of articles the author has written in the past two to three years: 

 

India Flagship ETFs with Low Fees and Fair Trading Volumes 

 

Low Expense Ratios, High Returns: Why Passive Equity Funds Matter  

How to Buy Nifty Midcap 150 Index 

 

India Passive Funds and Their Asset Size (Big picture view of Passive Equity Funds) 

 

Equity ETFs and Equity Index Funds Compared

 

India Equity ETFs Worth Considering

 

Analysis of Nifty 100 Low Volatility 30 Index 

 

India Equity ETF Risks and Returns 

 

Nifty BeES: Making Risk-Less Profits 

 

Junior Nifty BeES ETF: How to Make Higher Profits

 

This isn’t investment advice. Even though the author is a CFA Charterholder with nearly 25 years of experience in the financial markets, this is just general insight—not a recommendation.  

 

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Read More: 

 

Additional data:

 

Table 5: India passive equity funds and their asset size: Top 25 passive equity indices and their asset size with break-up of ETF and Index funds > 

 

(please click on the image to view better) 

 

 

 

References:

 

Nifty Passive Insights - Quarterly

Rupee Vest MF screener

 

NSE Index Dashboard - Jun2025 PDF (to compared risk / return data of Nifty Indices)

 

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Related Blogs on Mutual Funds (for a comprehensive list of all articles on Mutual Funds, look for section "4 Mutual Funds" in my blog Blog of Blogs Theme-wise): 

 

 

India Flagship ETFs with Low Fees and Fair Trading Volumes 12Jun2025

 

Low Expense Ratios, High Returns: Why Passive Equity Funds Matter 06Jun2025 

 

Mutual Fund Asset Class Returns 02Jun2025 (Fund categories with similar returns)

 

Mutual Fund Asset Class Returns 30Sep2024  (Fund categories with similar returns)

 

Arbitrage Funds and Avenues 24Jul2024

 

Rapid Growth is Assets of India's MF Industry 18Jul2024

Mutual Fund Categories with Similar Returns 17Jul2024

 

Side Pocketing Episode of Aditya Birla SL Dynamic Bond Fund 17Jul2024

 

Crux of Kotak Debt Hybrid Fund 15Jul2024

India Fixed Income Data Bank 02Jul2024

The Little Secret Behind Nifty Next 50 Index's Recent Success 13May2024

NSE Indices Calendar Year Returns: 2006 to 2024   05May2024

 

How to Buy Nifty Midcap Index 03May2024 

 

NSE Emerging Indices Comparison 31Mar2024 

 

India Passive Funds and Their Asset Size 29Apr2024 (Big Picture View of Passive Equity Funds) 

 

Guide to Tracking Error of Mutual Funds 27Apr2024 

 

Mutual Fund Asset Class Returns 31Mar2024 

 

Gilt Funds Worth Considering! 14Apr2024

 

Select Gilt Funds Performance 05Mar2024

 

Equity ETFs and Equity Index Funds Compared 05Feb2024

 

Indian Equity ETFs Worth Considering

 

Analysis of Nifty 100 Low Volatility 30 Index

 

Quarterly Data of MF Assets 31Mar2023

 

Understanding Corporate Debt Market Development Fund (CDMDF) 

Negative Impact of Debt Mutual Fund Tax Changes 

 

EPFO Investments in Stocks Via ETFs 

 

NSE Indices (Nifty 50, Nifty Next 50, Nifty 100 and Nifty 500) Comparison 31Dec2022

Why Do Indian Equity MFs Always Disappoint Investors?

 

Indian Mutual Funds and the Art of Ripping off Investors

  

Who is Eating My Gold ETF Return?

 

Mutual Fund Asset Class Returns 31Mar2024 (MF categories with similar returns)

 

Mutual Fund Asset Class Returns 31Dec2023 

 

------------------- 

 

 

Read more:

 

Blog of Blogs Theme-wise 

 

Weblinks and Investing

 

India Fixed Income Data Bank

 

Indian Economy Data Bank 

India Forex Data Bank 

 

Corporate Groups and Listed Companies 29Dec2024

 

Corporate Governance Concerns - Indian Companies 13Dec2024

 

Stocks and Peer Comparison by Industry 16Feb2024  

 

 

 

The Pitfalls of Market Timing and Why FOMO is Your Worst Financial Adviser 12Jul2025 

 

JP Morgan Guide to Markets 30Jun2025 

 

The Elusive Current Account Surplus: What 25 Years Data Reveal About India's Trade Balance 30Jun2025

 

India Flagship ETFs with Low Fees and Fair Trading Volumes 12Jun2025 

 

Low Expense Ratios, High Returns: Why Passive Equity Funds Matter 06Jun2025 

 

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Disclosure:  I've got a vested interest in Indian stocks and other investments. It's safe to assume I've interest in the financial instruments / products discussed, if any.

Disclaimer: The analysis and opinion provided here are only for information purposes and should not be construed as investment advice. Investors should consult their own financial advisers before making any investments. The author is a CFA Charterholder with a vested interest in financial markets.

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The Pitfalls of Market Timing – And Why FOMO is Your Worst Financial Adviser 12Jul2025

The Pitfalls of Market Timing – And Why FOMO is Your Worst Financial Adviser 12Jul2025

 

Follow @vrk100

 

 

(The views expressed here are for information purposes only and should not be construed as a recommendation or investment advice. While the author is a CFA Charterholder with nearly 25 years of experience in financial markets, this content is intended to share general insights and does not constitute financial guidance. Please consult your financial adviser before taking any investment decision. Safe to assume the author has a vested interest in stocks / investments discussed if any.)

 

Nobel Prize winner Daniel Kahneman was a pioneer in behavioural finance, which tries to explain why people sometimes make irrational financial decisions. Behavioural finance combines psychology and economics. 

 

Through his seminal books "Thinking, Fast and Slow" and "Noise," Daniel Kahneman exhorted investors to make fewer, more deliberate decisions and to avoid the cognitive pitfalls—such as overconfidence and noise—that often lead to poor outcomes in market timing. 

 

Daniel Kahneman once said that we're not as rational as we think when it comes to money--and I couldn’t agree more. His work on behavioral finance makes us aware of our own biases and helps us in understanding our own behaviour in times of market booms and busts.  

 

I was reminded of this all too clearly in my own investing journey, particularly with my long-held position in a telecom stock.

 

2. Frustration, Regret and a Missed Multibagger

In many cases, it seems almost inevitable—a stock often explodes right after we sell it. 

Let me recount a personal experience. I held Bharti Airtel stock for nearly a decade. The stock underperformed for much of that time, and like many long-term investors, I grew frustrated. In 2019, I finally gave up and sold my shares at Rs 340 a piece, thinking I had cut my losses and moved on.

But then, something unexpected happened: Airtel stock surged. Over the next six years, the stock multiplied almost six times—a painful reminder of what I had missed. 

But Airtel wasn’t the only one. Several other stocks in my portfolio have taught me similar lessons—about patience, timing and the emotional cost of investing.

Behavioral Finance in Action

Looking back, many of my mistakes weren’t analytical—they were emotional:

I acted out of exasperation and fatigue, not fundamentals.

Loss aversion: I was more focused on the years of underperformance than the long-term potential.

I fell into recency bias, letting short-term pain cloud long-term thinking. Market timing feels rational in the moment, but it's often driven by emotion and short-term thinking. In my case, it meant exiting just before the real returns began.

Anchoring bias: Once I sold, regret and anchoring kept me from re-entering. I was anchored to my sell price of Rs 340. Every new price felt "too high," even though the fundamentals had changed. Having made a decision, I subconsciously wanted to "stick with it" to avoid admitting I was wrong.

Daniel Kahneman’s work, especially in Thinking, Fast and Slow, now resonates deeply:
 

“We are prone to overreact to short-term noise and under-appreciate long-term trends.”

 

"All of us would be better investors if we just made fewer decisions." 

While I’ve made clear errors, such as selling Bharti Airtel prematurely, the overall resilience of my equity portfolio shows the power of staying invested. Over the long term, the portfolio has outperformed the market by almost 10 percentage points—a reminder that patience and discipline often beat perfect timing.

Key takeaways:

> Better to avoid emotional selling and buying

> Making fewer, deliberate decisions outfoxes frequent, reactive ones

> Stay invested in quality and let compounding do the magic for you

> Mistakes are part of the journey, but staying invested for long time pays off

 

3. Pitfalls of Market Timing 

 

Let us assume I'm prone to market timing. What assumptions I'm making here?

> I can forecast when the market will go up or down (despite overwhelming evidence that even professionals can't consistently predict short-term market moves)

> I'll be able to get in and out before the crowd (in a stampede, everyone gets trampled including the ones who thought they were ahead)

> I’ll know when to sell and when to get back in (as the story of Abhimanyu fighting in the Padmavyuham reminds us—-getting in may be easy, but getting out safely is another matter altogether)

> Timing the market will outperform buy-and-hold investing (long-term data show most market timers underperform simple buy-and-hold strategies)

I know I’m susceptible to biases—overconfidence, loss aversion and the temptation to time the market—but I’ve learnt to recognise their patterns in my investment decisions. While I can’t eliminate them entirely, I strive to manage them, and that awareness has made me a more grounded investor over the years.

 

So, how does market timing actually play out in the real world? The following section illustrates this through a real episode of volatility in the Indian stock market—specifically, the period between Oct2021 and Mar2023. 

 

 

4. Market timing in action with Nifty 50 volatility 

 

Between Oct2021 and Mar2023, the Indian stock market (reference: flagship index Nifty 50) played a psychological tug-of-war with investors. First came the all-time highs, then a slow, painful decline. 

 

Volatility was the norm. Every time it looked like the market might stabilise, it threw another tantrum. Many investors, understandably, were shaken out--emotionally and financially.

But here’s the kicker: just when most people gave up or sat on the sidelines, the market quietly began a one-way recovery from Mar2023 onwards.

 

By Sep2024, Nifty 50 had hit new highs — and a lot of investors missed it. 

Just check the Nifty price chart from Jan2021 to Dec2023, with high volatility between 18Oct2021 and 20Mar2023:

 (click on the chart to view better)

 

 

Timing the Market? Or Just Getting Played?

Let’s be real: market timing sounds smart in theory — buy low, sell high, right? But in practice, it often becomes buy high out of FOMO, sell low out of fear.

 

Graph showing high volatility period of 18 months between Oct2021 and Mar2023:

 

 

Between Oct2021 and Mar2023, the Nifty 50 index didn’t really go anywhere. Over that 18-month stretch, it was actually down about 9 per cent. 

 

 

Here’s what the average investor might have felt during this period:
 

Oct2021: When Nifty 50 hit 18,477 in the third week of Oct2021, every investor was euphoric as stocks rallied spectacularly from Mar2020 COVID-19 lows. We thought equity market was unstoppable and would scale new heights (see chart above for details).

 

Mar2022:  Denial & anxiety: But market tanks 14.1 per cent from all-time high to a low of 15,863. Fear kicks in. “Better get out before it gets worse.”

Apr2022: Market bounces back in just 28 calendar days--with Nifty 50 rising by 13.8 per cent to 18,053. Regret sets in. “Why did I sell?”

May2022: Fear & panic: Market falls again by 12.6 per cent to 15,782 in just 39 days. "Thank god, I sold early." 

 
Aug2022: Big rally of 17.4 per cent, in 62 days, with Nifty 50 touching 17,957 on 18Aug2022. “Should I get back in now?”

Dec2022: Hope & re-entry: Market hits 18,888. FOMO peaks. “I can’t miss this run!”

Mar2023: Frustration & whipsaw: Boom, back to 16,828! Down 10.9 per cent. “What just happened?!”


This constant back-and-forth is what Kahneman described so well. We’re not reacting to fundamentals. We’re reacting to emotion—to fear, to greed, and to what just happened yesterday.

 

In the high-volatility phase (Oct2021 to Mar2023), many investors:

> Cut their monthly investment plans (shun dollar-cost averaging)
> Pulled out money “to re-enter later”

> Caught on the wrong side of every market correction

> Some investors considered quitting stocks for good

Then, during the smooth and steady rally (Mar2023 to Sep2024), they: 

 

> Waited for a dip that never came 

> Told themselves “it’s overvalued now"

> Finally re-entered late--after the easy gains were made

 

5. The Problem with FOMO

FOMO (Fear of Missing Out) makes you act like a momentum chaser. You buy when everyone’s buying, and sell when everyone’s panicking. In a market ruled by cycles, you could end up always one step behind with FOMO.

 

It's like this: You're scrolling through Instagram, and everyone seems to be heading to the Coldplay concert. They’re posting pics, talking about how amazing it’s going to be—and suddenly, I feel this pull to join them. But in the rush to get there, I could end up caught in traffic gridlock and miss the concert entirely.

This is exactly how FOMO plays out in investing. You watch people posting about their portfolio gains—-and it feels like you have to get in. The fear of missing out makes you act impulsively, but in the process, you might end up getting caught in the chaos of market volatility.  
 

What Actually Works?

Here’s the boring-but-effective truth:

 

> Consistency beats timing

> Dollar-cost averaging works for many--if you don't panic every time the market drops
> Volatility is normal, not a red flag
> The market rewards patience, not panic

 

 

6. Indian stocks resilience 

 

Interestingly, while the Nifty 50 was swinging up and down during those 18 months—from Oct2021 to Mar2023—it actually held up a lot better than global markets--with the S&P 500, Nasdaq and most European indices experiencing heavy drawdowns during the same period. Technology stocks in the US were hit hard. Growth names collapsed. 

And yet, Indian equities showed surprising resilience. That probably added another layer of confusion for investors trying to time the market. You’d sell thinking things are about to get worse, only to watch Indian stocks stay steady while the rest of the world fell apart. 

 

Or you’d stay out waiting for a crash that never really came.

This “wait and watch” mindset often turns into “wait and miss.” And as Kahneman reminds us, our brains love to find patterns—even when none exist. We overreact to recent moves, anchor to past highs and assume what happened in the US or Europe will automatically happen here. 

 

But markets don’t follow our narratives. They do what they want—and usually at the exact moment we least expect.

From the lows of Mar2023 till the all-time-highs of Sep2024, Nifty 50 index surged by a staggering 56 per cent, moving from 16,800 to 26,200 within just 18 months. 

 

The first 18-month stretch—from Oct2021 to Mar2023—was honestly exasperating and felt like eternity. Markets were all over the place. One month up, the next month down. No clear direction, just a lot of noise.

But here’s the irony. That bout of volatility—the kind that tempts you to sell, trade more often or sit on the sidelines with oodles of cash—was exactly what set the stage for the next bull phase.

The following 18 months, from Mar2023 to Sept2024, turned out to be hugely rewarding for those who stayed invested.

 

In hindsight, it’s clear: the real test wasn’t about predicting the next move—it was about surviving the rough patch without losing your nerve. 

 

While this blog focuses on the period between Oct2021 and Sep2024, the gut-wrenching volatility witnessed in Indian stocks from Sep2024 to now (from all-time high of 26,277 on 27Sep2024 to 25,150 on 11Jul2025 for Nifty 50) has been on an entirely different scale.  

 

That period probably deserves a separate blog of its own.

 

7. Final Thoughts

 

I’m not saying that no one made money by moving in and out of Indian stocks during that volatile episode from Oct2021 to Mar2023. I’m sure some did. Each investor has their own style and their own way of navigating the markets. 

 

And if someone managed to trade those swings successfully—great. More power to them.

But here's the thing: for most people, trying to time the market through that choppy, uncertain phase likely meant missing out on what came next.

 

As Kahneman warned, high volatility doesn’t just test your portfolio--it tests your investing behaviour. It tempts you into believing that action equals control. That more trades mean more gains. But more often than not, the opposite is true. 

 

If you're prone to market timing mistakes, you can learn a lot from a Switzerland-based money manager Anthony Deden of Edelwiess Holdings plc. 

 

I’ve learnt more from Anthony Deden’s quiet but principled approach than from any flashy fund manager. His focus on scarcity, endurance permanence and independence changed how I view investing—not as a game of timing, but as a long-term practice rooted in capital preservation and quality. 

 

His philosophy gave me the courage to stay invested through annoying stock phases, knowing that the right business will endure if you're patient enough.
 

If you stayed the course during the tough times, you didn’t just survive--you thrived. But if you let fear or FOMO make decisions for you, the market’s rally likely happened without you.

You don’t need to be perfect. You just need to stay invested. In investing, doing nothing often beats doing something emotional.

 

This isn’t investment advice. Even though the author is a CFA Charterholder with nearly 25 years of experience in the financial markets, this is just general insight—not a recommendation. 

 

 

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References:

Tweet thread 15Sep2020 Market timing and portfolio rebalancing

 

Tweeth thread 29Mar2024 Daniel Kahneman's book "Noise" 

 

Tweet 13Mar2020 Anthony Deden talking to Grant Williams of Real Vision 

 

Edelweiss Holdings plc (Anthony Deden) presentation >

 

 

-------------------

 

Read more:

 

Blog of Blogs Theme-wise 

 

Weblinks and Investing

 

India Fixed Income Data Bank

 

Indian Economy Data Bank 

India Forex Data Bank 

 

Corporate Groups and Listed Companies 29Dec2024

 

Corporate Governance Concerns - Indian Companies 13Dec2024

 

Stocks and Peer Comparison by Industry 16Feb2024  

 

 

 

JP Morgan Guide to Markets 30Jun2025 

 

The Elusive Current Account Surplus: What 25 Years Data Reveal About India's Trade Balance 30Jun2025

 

India Flagship ETFs with Low Fees and Fair Trading Volumes 12Jun2025 

 

Low Expense Ratios, High Returns: Why Passive Equity Funds Matter 06Jun2025 

 

Mutual Fund Asset Class Returns 02Jun2025 

 

Currency Woes Put Pressure on US Equities and Bonds 22Apr2025

 

JP Morgan Guide to Markets 31Mar2025

 

Loss of First-mover Advantage

 

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Disclosure:  I've got a vested interest in Indian stocks and other investments. It's safe to assume I've interest in the financial instruments / products discussed, if any.

Disclaimer: The analysis and opinion provided here are only for information purposes and should not be construed as investment advice. Investors should consult their own financial advisers before making any investments. The author is a CFA Charterholder with a vested interest in financial markets.

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