New Delhi, Aug. 28 -- As the market sees a surge in thematic passive offerings alongside strong inflows into small-cap funds, Anupam Tiwari, the head of equities at Groww AMC, outlines why narrow themes suit evolved investors better and how the fund house balances its strategy through a quality-growth framework.

In a conversation with Mint, he discusses passive fund dynamics, small-cap valuations, global risks, and asset allocation frameworks.

In passives, there are three main categories: pure index funds for investors seeking low-cost broad exposure, thematic funds, and sectoral or niche funds.

In narrow thematic and sectoral categories, active fund management often struggles to add efficient value for two reasons. First, the universe...