ETFs leap 26x in 5 yrs, cross ₹2L cr

MUMBAI: There was a 26-fold rise in belongings underneath administration (AUM) of exchangetraded funds (ETFs) in somewhat over 5 years to greater than Rs 2 lakh crore now. The primary causes are authorities assist for these schemes, rising recognition amongst buyers, and acceptance by fund homes to launch fairness and debtbased ETFs with decrease administration prices.
Of the overall, ETFs on the NSE’s Nifty index have a 49% market share, accounting for somewhat over Rs 1 lakh crore, knowledge from MF trade physique Amfi confirmed. And gold ETFs managed belongings price a further Rs 13,500 crore. In response to NSE MD & CEO Vikram Limaye, the alternate was working actively with the MF trade “for creating investor consciousness and promotion of ETFs by varied channels of communication in India”.
Nifty 50 and varied different Nifty indices have been properly accepted and recognised for launching ETFs in India, stated NSE Indices CEO Mukesh Agarwal. His entity constructs and manages varied indices primarily based on which ETFs have been launched by fund homes. “NSE Indices believes in product innovation and we’ll proceed to work with varied stakeholders in creating new indices, together with debt indices, to facilitate new ETFs that may supply a wide range of funding merchandise to buyers,” Agarwal stated.
A big a part of the expansion in ETFs’ AUM may very well be attributed to the choice by the EPFO 5 years in the past to take a position a part of its incremental inflows in equities by the ETF route, fund trade officers stated. The variety of ETFs has additionally greater than doubled to 82, from 34 as of end-fiscal 2015.
In August 2015, the EPFO had initially agreed to take a position 5% of incremental month-to-month inflows into ETFs primarily based on the Nifty, after which included related schemes primarily based on the sensex. SBI Mutual Fund was the primary to get the EPFO mandate, adopted by UTI MF. Whereas this gave a lift to ETFs in India, the mandate by the federal government to launch a number of ETFs additionally boosted its recognition. Fund homes run by Nippon Life, ICICI Prudential and Edelweiss at present have authorities mandates to run fairness and debt ETFs.
In response to ICICI Prudential Mutual Fund MD & CEO Nimesh Shah, the 2 most necessary drivers for ETF development in India have been the federal government and the regulatory thrust on this phase. “The federal government thrust has been largely pushed by EPFO corpus allocations and adoption of ETFs for its disinvestment initiatives,” Shah stated.

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