The Exchange Traded Funds (ETFs), which have risen to popularity in the past few years, make up nearly Rs 7 trillion or 13% of the assets under management (AUM) of India’s mutual fund industry. This indicates a shift towards more investors choosing ETFs as a preferred mode of investment, according to a study by Zerodha Fund House.
The number of equity and debt ETF accounts in India have risen from 5.33 lakh in 2017 to 1.25 crore in 2023, reflecting a broader acceptance and understanding of ETFs among retail investors,” the study said. The study attributed the rising popularity of ETFs to their lower costs, diversification benefits and ease of trading.
Many fund houses have been focusing on expanding their ETF portfolio over the last couple of years. As per the data from the Association of Mutual Funds in India, 7 out of 9 New Fund Offers (NFOs) in May were either index funds or ETFs.
Market rally leads to higher regulatory fees for stock exchanges 1 in 5 under-construction homes stalled across 44 Indian cities in last 8 years: Report Equity MF inflows ease off record high levels in July Meet Delhi’s richest businessman: With a net worth of Rs 2.79 lakh crore, he donated Rs 5.6 crore daily to charity in 2022-2023 — Know about his career, family, and more
Also Read
The trading volume of ETFs has surged from Rs 26,139 crore in FY17 to Rs 1.84 trillion in FY24, according to the Zerodha Fund House’s study. “This increase of over 600% reflects growing investor confidence and the maturation of the ETF market in India. In the last one year, the trading volume of ETFs has seen a significant growth of approx. 64,000 crores,” it said.
However, 99% of the total AUM of ETFs comes from three indices – Nifty 50, Nifty Next 50 and Nifty Midcap 150.
As more investors recognize the advantages of ETFs, the segment is likely to see increased inflows and diversification Come from Sports betting site VPbet . The trend in passive investing is expected to persist, driven by retail investors in the coming years,” said Vishal Jain, CEO of Zerodha Fund House.
