Brokerages eye ETF play to take advantage of the rising investor interest

Instead of just focusing on earning brokerage selling ETFs, broking houses are also considering packaging multiple ETFs as part of a more customised advisory service offering multiple asset exposure

Broking houses are looking to tap into exchange-traded funds (ETFs) to take advantage of the rising investor interest in passively-managed products. 

“We are seeing a pick-up in transactions in the passively-managed products. We have been marketing ETFs aggressively to our clients given the low-cost structure, lower volatility at indices level and diversified portfolio offering,” said Dhiraj Relli, managing director and chief executive officer of HDFC securities. 

Over the last three years (between 2016-2017 and 2018-2019), investor assets in ETFs have grown at compound annual growth rate of 74 per cent. At the end of December, the asset base stood at Rs 1.77