Nifty 50 ETF Assets Base Crosses Rs 1 Lakh Crore Mark

On Wednesday, the National Stock Exchange (NSE) said that the asset base of all the exchange-traded funds (ETFs) tracking Nifty 50 index in the country has crossed Rs 1 lakh crore, indicating growing investors' interest in such products.

Also, the total assets under management (AUM) of the ETF (equity and debt) have reached Rs 2 lakh crore, the exchange said in a statement.

NSE added that ETF investments are witnessing good growth primarily due to transparency, diversification and cost-effectiveness.

"We are encouraged by the investors' continued confidence demonstrated through their participation in ETFs linked to Nifty 50 and other Nifty Indices...NSE will continue to actively promote ETFs to retail investors through multiple channels," NSE Managing Director and Chief Executive Officer Vikram Limaye said.

The first ETF was launched in India in December 2001 and was linked to Nifty 50. However, the actual growth in the ETF AUM has happened only in the past five years, wherein the asset base of ETFs has surged from Rs 7,032 crore as on August 2015 to Rs 2.07 lakh crore as on August 2020, indicating an annualised growth rate of 97 percent.

Also, the number of ETFs has also climbed from 36 to 82 as on August during the period.

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

The exchange believes these were significant measures and critical stepping stones for the success of the Indian ETF industry.