The Assets Under Management (AUM) of all Exchange Traded Funds (ETFs) and Index Funds tracking the Nifty 50 Index in India crossed 2 lakh crore.
Nifty 50 index-linked passive funds account for 40% of ETFs and index funds AUM in India. The popularity of Nifty 50-linked passive funds has grown steadily over the past 20 years, after a modest debut in December 2001, when the first ETF on Nifty 50 was launched.
As per the press release of NSE Indices Limited, at present, there are 17 ETFs and 19 Index Funds in India and 7 ETFs in international markets tracking Nifty 50 – Belvedere Index of India.
Vikram Limaye, MD & CEO, NSE said, “This milestone achieved in the Indian Passive Fund industry is due to the efforts made by all stakeholders including the Ministry of Finance (Government of India), Ministry of Labor and Employment (GoI), SEBI, EPFO. is the result. , Asset Management Companies, Investors, Trading Members, etc. We strongly believe that passive funds are suitable for retail and institutional investors to invest in capital markets. We will continue our efforts to promote passive funds. We are confident that with the continuous focused efforts of all the stakeholders, we will achieve many more milestones in the future.”
During the last 5 years, the Passive Funds AUM has increased from 52,368 crore as on March 31, 2017. 4,99,319 crore (~ 57% annual growth rate) as on March 31, 2022. During this period, the number of dormant funds available in India has also increased from 84 on March 31, 2017 to 228 as on March 31, 2022.
The financial year 2021-22 was a historic year for the Indian passive fund industry as it recorded record fund inflows of 1.28 lakh crore. In addition, 82 new passive products (ETF + Index Funds) were launched in FY 2011-22. Encouragingly, there has been a significant increase in retail participation in FY 2012 with over 1 crore new folios in FY 21-22, representing 60% of all outstanding folios of 1.73 crore as on March 31, 2022. As per the press release, Nifty Index reflects the overall growth of Indian Passive Fund AUM with Nifty Index with around 74% market share in terms of AUM of Equity and Debt Passive Fund industry in India.
Mukesh Agarwal, CEO, NSE Index said, “The adoption of passive funds in India has been increasing on a consistent basis, as evidenced by the large number of new folios created over the years. Passive fund inflows have been strong in the last financial year. And the trading volume of ETFs is also increasing steadily.”