Nifty 50 based ETFs and Index Funds AUM in India crosses Rs2 Trillion

4 May 2022 , 01:21 PM

The Assets under management (AUM) of all the Exchange Traded Funds (ETFs) and Index Funds tracking Nifty 50 index in India has crossed a new milestone of Rs2 lakh crores (Rs2 trillion). The Nifty 50 index linked passive funds account for 40% share of total passive funds (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 trade in the international markets tracking the Nifty 50 — the bellwether index of India. 

During the last 5 years, passive funds AUM has increased from Rs52,368 crores as on March 31, 2017 to Rs4,99,319 crores as on March 31, 2022 (annualized growth rate of ~57%). During this period, the number of passive funds available in India has also grown from 84 as on March 31, 2017 to 228 as on March 31, 2022.  The Financial Year 21-22 was a landmark year for the Indian passive funds industry as it registered record fund inflows of Rs1.28 lakh crores over the financial year. In addition, 82 new passive products (ETFs + Index Funds) were launched in FY 21-22. 

Encouragingly there has been significantly higher retail participation in FY 21-22 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.

Mr. Vikram Limaye, MD & CEO, NSE said: “We are highly encouraged by investors’ continued confidence demonstrated through their investment in passive funds linked to the Nifty 50 and other Nifty indices.  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.”

Mr. Mukesh Agarwal, CEO, NSE Indices Ltd. said: “We would like to thank the issuers for their continued confidence in Nifty indices for launch of new passive funds.  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. In FY 21-22, we launched 34 new indices which will provide more choices to investors to invest in ETFs and Index Funds linked to these indices. We will continue to work with various stakeholders to launch new and innovative indices to grow the passive funds market further.”