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Here’s why ETF market in India is attracting eyeballs

September 28, 2021 / 06:05 PM IST

The Exchange Traded Funds (ETFs) are becoming popular among investors. Even though India still has a long way to go in the ETF market maturity, when compared to other countries, the numbers look promising. As per a SEBI report, the ETF AUM has almost doubled from Rs 1.54 lakh crore at the beginning of FY21 to Rs 2.9 lakh crore at the end of FY21.

The rising interest can be attributed to the low-cost and well-diversified nature of ETFs. In addition, they can also act as alternatives to actively managed funds. Thus, to understand the acceptance of ETFs, how investors can gain from the product, etc., Sumaira Abidi of CNBC-TV18 held a virtual discussion about ETFs growth and interest only on Mirae Asset Mutual Fund present Decoding the World of ETF- Season 2 in association with Moneycontrol.

During the interesting conversation, experts Kaustubh Belapurkar, Director- Manager Research, Morningstar Investment Advisor India and Vaibhav Shah, Head – Products & Marketing, Mirae Asset Investment Managers spoke extensively about evolving ETF market in India, increasing interest from retail investors, including high net-worth individuals, future outlook and much more.

“We have seen how this space (passive investing) has evolved globally in the last couple of decades where passive funds, especially in the markets such as the US have only been growing. I don’t think we are there in India yet, but this is a space that is nice and clean to watch out for,” said Belapurkar, adding ETF space is a good investment strategy for those who are entering the markets for the first time, don’t know where to invest, etc.”

Bringing in the AMC perspective, Shah said in the last five years, retail participation has grown 20 times in passive investing.

“One of the biggest disruptions that has happened in the field of the financial sector is passive investing and ETFs. The trend of disruption has also entered India and we’ve seen that ETF market, which was completely dominated first by gold ETFs and then a large part of the money by EPFOs, has now started to broaden and a lot more offerings are also available from the asset management industry,” said Shah.

The conversation also saw insightful points on ETF trends, product offerings by asset management companies, how investors can build a portfolio with active and passive funds.

Watch the webinar here
first published: Sep 28, 2021 06:05 pm