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AMFI data shows that Rs. 62,100 crore (over 9%) of AUM in ETFs has come from individual investors.
The total AUM of ETFs across investor types was Rs. 6.64 lakh crore in March 2024. Of this, AUM of Rs. 47900 crore (over 7% of the total ETF AUM) and Rs. 14400 crore (over 2% of total ETF AUM) has come from HNIs and retail investors, respectively.
Neelesh Verma, AVP and Product Head, Coin by Zerodha attributed this low share to lack of awareness about ETFs. He said, “ETFs are not very popular among the masses. People are still taking the FoF route to participate in ETFs. There is also a lack of understanding on how ETFs work. I think that AMCs need to be more transparent about the working of ETFs and make education of investors a priority to make it more popular.”
Citing liquidity issue, Mumbai MFD Nimish Ashar of Nimish Ashar said, “Lots of ETFs are not liquid, which is making investors reluctant to invest in them. Also, a lot of retail investors still do not have a demat account.”
Agra MFD Shifali Satsangee, Founder and CEO, Funds Vedaa said that lack of awareness and low popularity of ETFs among individual investors are the reasons for lower participation of individuals. She said, “There is little awareness about ETFs among individual investors. Also, ETF investors need a demat account for investment, which is not the case for active funds.”
Clearly, HNIs are moving towards ETFs. In this context, Cafemutual is holding Cafemutual Passives Conference on May 10 at Taj Santacruz Mumbai.
Visit www.cafemutualevents.com to know more.
