2 min read.Updated: 04 May 2022, 01:13 PM ISTLivemint
Currently, there are 17 ETFs and 19 index funds in India and 7 ETFs in the international markets tracking the Nifty 50
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Assets under management (AUM) of all the Exchange Traded Funds (ETFs) and Index Funds tracking Nifty 50 index in India crossed ₹2 lakh crore.
Nifty 50 index-linked passive funds account for 40% share of ETFs' and Index Funds' AUM in India. The popularity of passive funds linked to the Nifty 50 has grown consistently over the last 20 years, after humble beginnings in December 2001, when the first ETF was launched on the Nifty 50.
Currently, there are 17 ETFs and 19 index funds in India and 7 ETFs in the international markets tracking the Nifty 50 – the bellwether index of India, according to the NSE Indices Ltd. press release.
Vikram Limaye, MD & CEO, NSE said, “This milestone achieved in the Indian passive funds industry is the culmination of efforts put in by all stakeholders including Ministry of Finance (GoI), Ministry of Labour & Employment (GoI), SEBI, EPFO, Asset Management Companies, Investors, Trading members, etc. We strongly believe that passive funds are well suited for retail and institutional investors to invest in capital markets. We will continue with our efforts to promote passive funds. We are confident that with the continued focused efforts of all stakeholders, we will achieve many more milestones in the future."
During the last 5 years, passive funds AUM has increased from ₹52,368 crores as on 31 March, 2017 to Rs. 4,99,319 crores as on 31 March, 2022 (annualized growth rate of ~57%). During this period, the number of passive funds available in India has also grown from 84 as on 31 March, 2017 to 228 as on 31 March, 2022.
The financial year 2021-22 was a landmark year for the Indian passive funds industry as it registered record fund inflows of ₹1.28 lakh crores. In addition, 82 new passive products (ETFs + Index Funds) were launched in FY21-22. Encouragingly there has been significantly higher retail participation in FY22 with more than 1 crore new folios created in FY 21-22, representing 60% of all outstanding folios of 1.73 crores as on March 31, 2022. The steady rise of passive funds AUM tracking the Nifty indices has mirrored the overall growth of the Indian passive fund AUM with Nifty indices accounting for about 74% market share in terms of AUM of Equity & Debt passive funds industry in India, as per the press release.
Mukesh Agarwal, CEO, NSE Indices said, “Adoption of passive funds in India is increasing on a continuous basis as evident from the large number of new folios created in the last couple of years. Inflows into the passive funds have been strong in the last financial year and trading volumes of ETFs are also rising steadily."