Assets of Nifty 50-based ETFs rise six-fold in a year

Total AUM of ETFs benchmarked to Nifty indices now account for 85% of total market share of equity ETFs

The National Stock Exchange of India (NSE) has seen a six-fold jump in volumes of exchange traded funds (ETFs) based on its index Nifty 50. The assets under management (AUM) of these ETFs surged to Rs 8,533 crore as on March 31, 2016 from Rs 1,251 crore a year ago.

According to a note put out by the exchange, total AUM of ETFs benchmarked to Nifty indices now account for 85 per cent of the total market share of equity ETFs. As on March 31, the AUM of ETFs benchmarked to Nifty indices amounted to Rs 12,865 crore out of a total equity ETF size of Rs 15,066 crore.

Last year, the NSE started incentives for market makers to boost liquidity in ETFs listed on it. The exchange had started a liquidity enhancement scheme, with the incentives to be computed and settled on a monthly basis.

Some of the ETFs traded on the NSE platform include Nifty 50, Nifty Bank, Nifty CPSE, and Nifty 100. A total of 33 out of 43 equity ETFs traded in India are benchmarked to Nifty indices, according to the exchange. Of these, 13 ETFs are benchmarked to the Nifty 50 index and five to the Nifty Bank index.

“ETFs are well researched, relatively small value and low-cost products, and they suit the needs of retail investors. We believe the current and upcoming ETFs benchmarked to Nifty family of indices will give various investment options to the retail investors and be instrumental in wealth creation,” said Mukesh Agarwal, CEO of India Index Services and Products, which designs and maintains all indices of the Nifty family. ETFs are a group of securities, which are traded like individual stocks on an exchange. ETFs can track equity indices, bonds and commodities.