As per NSE (National Stock Exchange), 100 ETFs have been listed so far, with 21 ETFs getting listed on NSE in the last year. The assets which are under the management of ETFs in India are now at Rs 3.16 lakh crore which is witnessing more than a 13.8 times increase in five years as compared to Rs 23,000 crore (April 2016).
The units in an ETF can be sold or bought only on a stock exchange anytime during trading hours. ETFs are low-cost investments and allow one to take several stocks of the same index at the same time. They come in various forms and typically track different indexes and sectors and not just equities, there are also gold and even international ETFs that are listed on the stock exchanges.
The Nifty 50 Index continues to be the most admired index and 17 asset management companies (AMCs) have launched an ETF on this index. The other popular equity indices include Nifty Bank Index and Nifty Next 50 index on which AMCs have launched.
With the rising popularity of ETFs and also acquiring of passive investment options by investors, AMCs are now seeing increasing traction and have been launching ETFs on different themes such as sectoral ETFs like Healthcare & Consumption, strategy ETFs on indices such as Nifty Alpha Low-Volatility 30 Index, Nifty 100 Low Volatility 30 Index, Nifty 200 Quality 30 Index, Nifty50 Value 20 index, etc.
ETFs are also available on Gold. There are 11 ETFs with the fundamental assets as Gold. The last financial year has witnessed a very high record involvement with more than 12 lakh investors transacting in Gold ETFs. The Assets that are under management in Gold ETFs have touched Rs. 16,624 crores 2.5 times increase in the last 5 years.
In order to encourage participation in equity ETFs Government of India has also reduced securities transaction tax (STT) to just 0.001 percent applicable only during the selling of the units. STT is not applicable to the non-equity-oriented ETFs.
The average daily income of ETFs on NSE stood at around Rs. 265 crores in the current financial year. The number of investors that are transacting in ETFs has also raised up by 96 percent from 20.4 lakhs in the financial year 2020 to 40.1 lakhs in the financial year 2021. The first 3 months of financial year 22 has already seen transactions by more than 22 lakh investors
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