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An analysis on AUM data done by Cafemutual reveals that individual investors account for 9% of the total ETF assets that track performance of equity and debt markets in December 2023. Such a contribution was 8% in December 2022.
These investors have ETF AUM of Rs.54000 crore in December 2023. Of this, while retail investors account for 2% of the total ETF assets with Rs.12,500 crore, HNIs contribute 7% or Rs 41,600 crore to the ETF assets.
Pratik Oswal, Head of Passive Funds, Motilal Oswal MF attributes this to lack of awareness about passive funds and limited investment options as majority of ETFs were launched over the last two years. He said, “I am hopeful that with more ETFs being launched now, the contribution of individual investors in ETFs will go up.”
Siddharth Srivastava, Head – ETF Product and Fund Manager, Mirae Asset MF believes that more people will come to ETFs. He said, “Increase in liquidity and unique ETF offerings will attract more investors to participate. Also, as more people open demat accounts and get comfortable with trading on the exchange platforms, we will see more participation from retail investors.”
Overall, AUM of passives funds stands at Rs 8.50 lakh crore, out of which Rs 1.75 lakh crore came from individual investors (HNI+ retail). Passives comprises index funds, other ETFs and gold funds.
