India's ETF industry crosses ₹10 lakh crore AUM as ETF apps gain attention

India's exchange-traded fund (ETF) industry has crossed ₹10 lakh crore in assets under management, reflecting a shift in how Indian investors are approaching portfolio building. For a long time, mutual funds remained the primary focus of retail investment activity. Today, ETFs are drawing growing interest across different investor groups, from those exploring markets for the first time to those with longer investment experience. The availability of mobile investment platforms has also contributed to this trend by making ETF investing more accessible. This article looks at why ETF adoption is growing and how ETF apps are supporting investor participation in this space.

What is driving this growth?

In recent years, index-based investing has gained traction in India. Passive investment strategies, where a portfolio replicates an index such as the Nifty 50 or the Sensex, have attracted attention for offering index-linked performance without the complexity of active fund selection.

Many retail investors may find ETFs simpler to manage compared to actively managed funds. This is likely because expense ratios are generally lower, the investment strategy is transparent, and unlike traditional mutual funds, ETFs trade on the exchange in real time, meaning pricing is live and execution is direct.

The range of available products has also expanded. Gold ETFs, sectoral ETFs, international ETFs, and debt ETFs are now widely available, giving investors options across different asset classes and risk profiles. Growing awareness around diversification and long-term investing has further encouraged more investors to consider ETFs as part of their portfolio approach.

The role of ETF apps in this shift

One factor contributing to this growth is how the process of investing in ETFs has changed. An ETF app helps users search for funds, review tracking error, compare expense ratios, and complete transactions through one mobile platform. Steps that previously involved intermediaries and longer settlement timelines can now be completed more quickly through digital tools.

For new investors, this simplicity can prove to be user-friendly. Rather than analysing individual stocks or comparing active fund managers, users can select an index, invest a fixed amount regularly, and track their portfolio through the same platform.

Improved platform accessibility has supported rising ETF transaction volumes on the NSE and BSE.

Why this matters for long-term investors

ETFs offer a way to build diversified market exposure without high fees or concentrated risk. Key characteristics include low costs, regulatory oversight under SEBI, intraday liquidity, and a range of index choices.

The growth in AUM figures reflects increasing investor interest in passive products over recent years. This appears to be a structural shift in retail investing behaviour rather than a short-term movement, and digital platforms that simplify ETF access are part of that change.

What to look for in an ETF app

Not every stocks app offers the same level of access, data, or tools. When exploring where to invest in ETFs, users may consider the following:

1. Real-time market data and live NAV tracking help users stay informed about fund performance.
2. Low brokerage costs on ETF transactions can affect overall returns over time.
3. A wide range of ETFs across asset classes gives users more options to match their requirements.
4. Clear portfolio visibility and performance tracking support ongoing account management.
5. Reliable execution during high-volume market periods is an important practical consideration.

Features such as detailed fund information, comparison tools, and straightforward navigation may also support a more convenient investing experience. Even small differences in brokerage costs, tracking efficiency, or execution quality might have a visible effect on long-term portfolio outcomes.

Conclusion

India's ETF industry has grown considerably in recent years, reflecting broader interest in low-cost and diversified investment options. As more investors explore passive investing, ETF apps are playing a role in simplifying access to these products. Platforms such as 5paisa are part of this shift, offering access to a range of ETFs, real-time market data, portfolio tracking tools, and competitive brokerage pricing through a single platform. As the ETF market continues to develop, investors are likely to consider platform features such as ease of use, transparency, and execution reliability when choosing where to manage their investments.

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The content may be for information and awareness purposes and does not constitute any financial advice.