SEBI Chairman Ajay Tyagi on Thursday highlighted the rising investor interest in exchange traded funds (ETFs) and said that the regulator is examining ways to improve liquidity of ETFs on exchanges.
"SEBI is examining how to increase ETF liquidity on exchange platforms," Tyagi said in a conference organised by NISM. He added that SEBI is also looking to introduce new ETF products like corporate bond ETFs to increase liquidity in corporate bond market.
Highlighting the rising interest in ETFs in India, Tyagi said the "Proportion of ETF AUM to total mutual fund AUM increased from 2% at end of FY 2016 to 9% at end of FY 2021. From Rs 1.54 trillion at beginning of FY 2021, ETF AUM has almost doubled to Rs 2.9 trillion at end of FY 2021."
Further, the SEBI chief said ESG themed mutual fund schemes are also gaining investment interest. "The number of NFOs having ESG theme shot up by 300% during FY 2021, while the amount mobilized shot up by 189% during the same period. As at end of March 2021, the AUM of domestic mutual fund schemes with ESG theme stood at more than Rs 100 billion (Rs 10,000 crore)," he said.
Tyagi also hinted on introduction of gold spot exchange soon. The proposed gold spot exchange would provide a new asset class for investors and emerge as a global price setter for the commodity, said Tyagi.
