The broking community should take up distribution of exchange traded funds with vigour as passive management instruments such as these hold lot of potential, Chitra Ramakrishna, Managing Director & Chief Executive, National Stock Exchange said.
“More of you (ANMI members) should distribute this product (ETFs). We need to invest more in the distribution of this product as a push product”, she said at the 7th international convention of the Association of National Exchanges Members of India here on Saturday.
There is also a need for more of large manufacturers such as Vanguard, iShares and UTI to be present here too (in ETFs in the Indian market), Ramakrishna said.
Clearly from a reach-out perspective, a standard, simple passive product like an ETF lends itself to a greater mass managed outreach programme than a typical underlying equity.
COST EFFECTIVE Ramakrishna highlighted that several measures had been taken over last few years by SEBI and the Income-Tax Department to make ETFs cost-efficient and also attractive.
On the Government’s efforts towards launching a format of Central Public Sector Enterprises Exchange Traded Fund (CPSE-ETF), she said that it could — as a product with right composition and return — bring in several investors (retail and institutional) to the market.
During 2008-11, when global markets were under stress, ETFs continued to grow as a class with a compound annual growth rate of over 10 per cent globally.