Indicating growing investor interest in capital markets, the average assets under management of equity-based exchange traded funds (ETFs) on the NSE has grown nearly five times to Rs 4,210 crore in the quarter ended March over the same period last year.
The average asset under management (AUM) stood at Rs 964 crore for ETFs which cater to equity as underlying benchmark in the March, 2014 quarter, as per the latest data by the National Stock Exchange (NSE).
Currently, there are 29 equity-based ETFs listed on the country's largest bourse NSE.
According to the data, the average AUM for equity-based ETFs stood at Rs 1,378 crore in June, 2014 quarter which rose to Rs 1,638 crore for the three months ended September, 2014.
Further, the AUM increased to Rs 2,182 crore for quarter ended December, 2014.
The average AUM for such ETFs stood at Rs 4,210 crore as on quarter ended March, 2015.
"Since last one year there has been positive expectations from the market. The NSE has added 15 lakh new investors and there has also been continuous interest from foreign institutional investors who have been taking the ETF route," NSE's chief of business development Ravi Varanasi told PTI.
He added that the Bank Nifty has shown maximum activity with regard to the ETFs, taking nearly 40 per cent of the share.
ETFs are essentially index funds that are listed and traded on exchanges like stocks. The fund is a basket of stocks that reflects the composition of an index. Its trading value is based on the net asset value of the underlying stocks that it represents.
ETFs provide investors a convenient way to gain market exposure through an index that trades like a stock. In comparison to a stock, an investment in an ETF index product provides a diversified exposure to the market. Depending on the index, investors may obtain exposure to countries or sectors.
Meanwhile, the average AUM for CPSE ETFs saw a decline of 4.7 per cent to Rs 2,414 crore during the reporting quarter.
Similarly, the average AUM in gold ETFs also declined by over 2.5 per cent to Rs 6,997 crore in the same period.
