Asset under management of ETFs tracking Nifty crosses Rs 1 lakh crore

The Asset under management (AUM) of all the Exchange Traded Funds (ETFs) tracking the Nifty50 index in India has crossed a new milestone of Rs 1 lakh crore, NSE said in a press release on September 16.

The total AUM of the ETF (equity & debt) industry in India has crossed Rs 2 lakh crore, the release added.

"This milestone achieved is the culmination of efforts put in by all stakeholders such as Ministry of Finance (GOI), Ministry of Labour & Employment (GoI), SEBI, EPFO, ETF issuers, investors, trading members, etc.," NSE said in the release.

As per NSE, ETF investments in India are witnessing good growth primarily due to transparency, diversification and cost-effectiveness.

In March 2014, the GoI decided to take the ETF route for disinvestment through CPSE ETF. The Employees’ Provident Fund Organisation (EPFO) started to invest a part of its funds in equities through the ETFs in August 2015.

These are significant measures and critical stepping stones for the success of the Indian ETF Industry, NSE said.

The first ETF was launched in India in December 2001 and was linked to Nifty50.

However, as per NSE, the actual growth in the ETF AUM has happened only in the last five years wherein the AUM of ETFs in India has grown from Rs 7,032 crore as on August 31, 2015, to Rs 2.07 lakh crore as on August 31, 2020 (annualised growth rate of 97 percent).

During this period, the number of ETFs available in India has also grown from 36 as on August 31, 2015, to 82 as on August 31, 2020, NSE pointed out.

On this occasion, Vikram Limaye, MD & CEO, NSE said: "We are very encouraged by the investors’ continued confidence demonstrated through their participation in ETFs linked to Nifty50 and other Nifty Indices. NSE has been on the forefront and has been working actively with the mutual fund industry for creating investor awareness and promotion of ETFs through various channels of communication in India."

"NSE will continue to actively promote ETFs to retail investors through multiple channels. I am confident with the focused efforts of all the stakeholders we would achieve many more milestones in the future," he added.

Mukesh Agarwal, CEO, NSE Indices said: "Nifty50 and various other Nifty indices have been well accepted and recognised for launching ETFs in India. In addition to Nifty50, there are 25 other Nifty indices on which ETFs are available in India. NSE Indices believes in product innovation and we will continue to work with various stakeholders in developing new indices, including Debt Indices, to facilitate new ETFs that will offer a variety of investment products to investors."