New Delhi, Aug. 27 -- Index funds have witnessed a dramatic rise in popularity among retail investors over the past five years, accounting for a much larger share of their passive mutual fund assets than they did in 2021.

The share of index funds in retail passive AUM jumped from 11.5% in March 2021 to 55% in March 2026, according to the AMFI-Crisil Factbook 2026.

Meanwhile, the share of other Exchange-Traded Funds (ETFs) fell sharply from 83.8% to 30.1%, over the same period.

This shift in the passive investing category comes despite ETFs being considered the "cheaper" option because of their low expense ratios, which refers to the annual fee charged for managing and operating the fund.

ETFs expense ratios typically range from 0.04-0...