New Delhi, Sept. 30 -- Investors hunting low-cost but innovative market bets are fueling a boom in niche passive funds targeting better returns than plain-vanilla alternatives, often alongside indices designed to track them. Sometimes, it's the other way around.

Passive funds, as the name suggests, are passively managed and mirror the performance of indices such as Nifty 50 or S&P BSE 500, allowing investors a low-cost and less risky exposure to the market.

But as family offices and individual or retail investors also seek higher returns from passive funds, India's mutual fund industry is getting bolder with niche thematic products. The growing interest in passive funds coincides with the underperformance of several active funds relativ...