The NSE expects assets under exchange-traded funds to increase to ₹1 lakh crore before end of this year, from ₹89,515 crore in October.
The first ETF in India was launched in December 2001. This ETF was benchmarked to the Nifty 50 index. The assets under management of domestic equity and debt ETFs grew at the rate of 28 per cent a year over the last 11 years.
Over the same period, the number of debt and equity ETFs increased to 60 from six. In October, equity and debt ETF assets registered a growth of 62 per cent to ₹89,515 crore from ₹55,166 crore logged in September 2017. Global ETF AUM grew at 19 per cent a year between 2009 and 2017, crossing $5 trillion recently.
Vikram Limaye, Managing Director, NSE, said the government’s initiative to use ETFs for disinvestment and EPFO’s investment in equity through ETFs have been the key enablers for the growth of this low-cost investment product.
India ETF Conference 2018
“We expect the Indian ETF asset size to grow multi-fold over the next few years and cross ₹1 lakh crore before this year end,” he added at the India ETF Conference 2018 held in Mumbai on Monday.
Nifty indices have 76 per cent market share in the AUM of equity and debt ETFs. As on October-end, there are 43 ETFs based on 17 Nifty indices with AUM of ₹68,409 crore.
Of these, Nifty 50 is the most popular index with a total ETF AUM of ₹51,703 crore. As of November 30, 10 ETFs linked to Nifty indices are listed on 17 global exchanges across 15 countries, including the US, the UK, Europe, Hong Kong, Taiwan, Japan, South Korea and Singapore.
Atanu Chakraborty, Secretary, Department of Investment and Public Asset Management, said the ETF route will now be used by various stakeholders, including the government, to continue monetising their holdings in public sector enterprises and also by PSUs to raise debt in a more cost-effective manner.