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September 2024 ended on a good note for passive funds. The total AUM of passive funds grew by 3% to reach Rs.11.30 lakh crore in September 2024 from Rs.10.94 lakh crore in August 2024.
Overall, the net inflows in passive funds reduced substantially to Rs.3250 crore from Rs.14600 crore in August 2024 largely due to redemption from liquid ETFs.
Let us look at the key highlights of passive funds in September 2024.
Investor Participation
● Passive funds have 3.51 crore folios, which is 17% of the industry’s total folio count
● Equity ETFs has the highest number of folios at 1.35 crore followed by equity index funds at 1.07 crore
Number of Schemes
● Equity ETFs has the highest number of schemes at 159 followed by equity index funds at 136
● Total number of passive schemes across all categories is 524
Top three Inflows and Outflow
● Domestic equity Index funds showed good growth with the highest inflow at Rs.6,610 crore, a 49% increase from August. It is followed by equity ETFs at Rs.6,140 crore and gold ETFs at Rs.1,230 crore.
- On the other hand, debt ETFs had the highest outflow of Rs.5,135 crore. This was followed by debt Index Funds (TMFs) at RS.3,225 crore and debt index funds (other than TMFs) at Rs.1,345 crore.
Here is a table depicting the Inflow and AUM data (in crore)
|
Scheme category |
NetFlow (in Rs. crore) |
AUM (IN Rs. lakh crore) |
|
Equity index funds |
6,608.35 |
1,49,949.25 |
|
International Equity index funds |
-26.74 |
5,085.53 |
|
Debt Index Funds (TMFs) |
-3,226.68 |
93,114.79 |
|
Debt Index Funds (Other than TMFs) |
-1,344.32 |
14,175.09 |
|
Other Index Funds |
-50.35 |
3,563.75 |
|
Gold ETF |
1,232.98 |
38,166.12 |
|
Equity ETFs (Domestic ETFs) |
4,909.73 |
6,76,868.92 |
|
Equity ETFs (International ETFs) |
-39.56 |
11,980.43 |
|
Income/Debt Oriented oriented ETFs |
-5,135.12 |
1,01,407.11 |
|
Silver ETF |
646.01 |
10,350.58 |
|
Overseas FoF (Active Funds) |
-242.29 |
16,941.13 |
|
Overseas FoF (Passive Funds) |
-77.94 |
8,166.20 |
|
Total |
3,254.06 |
11,29,768.90 |
Arun Sundaresan, Head, ETF, Nippon India MF attributes the increase in AUM of passives funds to sustained inflows in index funds. He said, “The number of funds that have been launched has increased consumer interest in the index. Also, after smart beta, passive investing today doesn't just mean you are getting the day's market return, but there are now very interesting strategies that help you outperform the index, which is capturing the interest of investors and distributors alike.”
Thane MFD Sandeep Baravkar of SRS Financial Services said that the awareness about passive funds has increased substantially, be it through social media or knowledge-based websites. He said, “During asset allocation as well, passive funds are always a percentage of the investment strategy, especially for HNI investors. It is always recommended to put a sizable percentage (20-30%) of your portfolio in passives.”
