In a sign of growing investor interest in exchange-traded funds (ETFs), their asset base on National Stock Exchange’s Nifty 50 jumped nearly 7-fold to Rs 8,533 crore at the end of March.
Assets Under Management (AUM) of ETFs based on Nifty 50 index has surged to Rs 8,533 crore as on March 31, 2016 from Rs 1,251 crore at the end of preceding financial year.
Besides, total assets base of ETFs benchmarked to Nifty indices commands 85 per cent market share.
Total AUM of equity ETF industry stood at Rs 15,066 crore at the end of last fiscal, (2015-16).
“ETFs are well researched, relatively small value and low cost products thus they suit the need of retail investors,” said Mukesh Agarwal chief executive at India Index Products & services Ltd (IISL) — designs and maintains all indices of Nifty family.
“We believe that current and upcoming ETFs benchmarked to Nifty family of Indices will give various investment options to the retail investors and be instrumental in wealth creation,” he added.
ETFs are group of securities which are traded like individual stocks on an exchange. They can track equity indices, bonds and commodities among others.
Moreover, a small time retail investor can buy ETFs for as little as about Rs 100 and these can be then bought and sold as a share on the exchange with a minimum trading lot of one unit and carry lower management costs when compared to mutual funds.
Among the popular ETFs traded on the NSE platform are Nifty 50, Nifty Bank, Nifty CPSE, Nifty 100. A total of 33 out of 43 equity ETFs traded in India are benchmarked to Nifty family of indices.