Exchange traded funds were first introduced in India in 2001. Despite their low cost, simplicity and transparency, retail participation in ETFs has been low.
However, there has been increased interest among retail investors in recent times, thanks to the underperformance of the actively-managed large-cap equity funds against their respective benchmarks such as the Nifty 50 TRI and the Sensex 30 TRI.
Data sourced from the AMFI shows that the retail AUM in the ‘other ETFs’ category (which includes all ETFs, excluding gold) grew significantly by 120 per cent in FY19 to ₹6,534 crore. In FY18, the retail AUM in the ‘other ETFs’ category grew by only 10 per cent.
