National Stock Exchange of India, India’s leading stock exchange, today organized the 'India ETF Conference 2018' in Mumbai. The objective of this conference is to bring together various stake holders from the ETF space, including domestic & international experts, to exchange thoughts and help facilitate growth of the Indian ETF industry.
Shri Atanu Chakraborty, Secretary, DIPAM, Government of India, in his keynote address said: ‘’We appreciate NSE’s efforts in creating awareness about ETFs. With such efforts, retail investors’ participation in ETFs is expected to rise further. ETF route shall now be increasingly used by various stake-holders including by the government to continue monetising their holdings in Public Sector Enterprises and also by PSUs to raise debt in a more cost-effective manner.’’
Speaking on the occasion, Mr. Vikram Limaye, MD & CEO, NSE said, “NSE is positive on the growth prospects of ETFs in India and is closely working with all stakeholders to further develop ETF market in India. ETF is a low cost investment product and provides easy diversification. We believe that education and awareness amongst retail investors about these benefits of investing through ETFs will increase their participation in this product. NSE has organized more than 2,500 Investor awareness programs for retail investors across different cities through-out the year. Many such programs were organized in association with the capital markets regulator SEBI.”
“Likewise, availability of relevant market representative indices plays a pivotal role in furthering ETF growth. It has been our endeavor to develop innovative indices representing various investment strategies covering multiple asset classes. NIFTY indices are the most preferred benchmarks for ETFs in India. Government’s initiative to use ETFs for disinvestment and EPFO’s investment in equity through ETFs have been the key enablers for the growth of this low cost investment product in the country. We expect the Indian ETF asset size to grow multi-fold over the next few years and cross INR 1 Lakh cr before December 2018 end’’ Mr Limaye said.
The First ETF in India was launched in December 2001 which was benchmarked to the NIFTY 50 index, India’s flagship index. From there, ETF market in the country has witnessed a strong growth trajectory both in terms of total AUM and number of ETFs. The Asset under Management (AUM) of Domestic Equity & Debt ETFs has grown at a stellar rate of ~28% per annum over the last 11 years. Over the same period, number of Debt and Equity ETFs have increased 10x from 6 to 60. Growth post 2014 has been extra-ordinary where the AUM has grown 19x. In Oct 2018, equity and debt ETF AUM in India was INR 89,515 crs - a staggering 62% growth from September 2017 when it was INR 55,166 crs and a 10x growth from September 2015 when it was INR 8,920 cr. Global ETF AUM has grown at a rate of 19% per annum between 2009–2017 crossing USD 5 trillion recently.
In the domestic ETF space, NIFTY Indices have 76% market share in AUM of equity and debt ETFs. As on October 31, 2018, there are 43 ETFs based on 17 NIFTY Indices with an overall AUM of INR 68,409 cr. Of these, NIFTY 50 is the most popular index with total ETF AUM of INR Rs. 51,703 cr. Further, as of November 30, 2018, 10 ETFs linked to NIFTY indices are listed on 17 global exchanges across 15 countries including USA, UK, Europe, Hong Kong, Taiwan, Japan, South Korea, Singapore etc.
Mr. Atanu Chakraborty, Secretary, Department of Investment and Public Asset Management (DIPAM) was the key-note speaker for the conference. Other dignitaries who were present on this occasion included Mr Abdel Bizid, Head of iShares Product, Platform and Markets, Asia Pacific; Mr Matthieu Guignard, Global head of product development and capital markets, Amundi; and various other industry leaders and practitioners.
There were two panel discussions during the conference – the first one focused on “Indian ETF industry: Growth Trajectory, Challenges and Way Forward”. The second panel emphasized on “Smart Beta ETFs: Global landscape and growth potential in India”.