Markets

NSE mulls launching more commodity ETFs

Our Bureau Mumbai | Updated on January 23, 2018

Chitra Ramakrishna, Managing Director and CEO of National Stock Exchange. File Photo   -  The Hindu

India mostly has equity, gold and gilt ETFs.

The National Stock Exchange (NSE) hopes to see the launch of more commodity exchange traded fund (ETFs) in the next few months, Chitra Ramakrishna, MD and CEO, NSE, said here at an event to celebrate 20 years since the launch of the NSE. The exchange organised the event to discuss the future of ETFs in India.

An ETF is like a mutual fund which issues units and closely tracks the price of an underlying security (like stock or a commodity), but can be traded on an exchange platform. India mostly has equity, gold and gilt ETFs, but globally, the ETF industry offers products on other commodities and fixed income securities.

Ramakrishna said that stock exchanges will become "multi-asset class businesses as they begin to offer more broad-based indices... The benefit to ETFs is cost rationalisation and this has been consistently coming down. In India, this is less than half a percent, which is higher than the global average. But cost is a function of assets under management."

Ramakrishna said the NSE is working to introduce quality, value, thematic indices to encourage more ETFs and smart beta investing. "Increasing the liquidity of the ETF market and developing mass retail products are necessary going forward," she said.

The NSE also felicitated the 16 companies that have been part of its benchmark 50-strong Nifty index through the 20 years of its existence. These are: ACC, Ambuja Cements, Bajaj Auto, Grasim Industries, HDFC, HDFC Bank, Hindalco, HUL, ICICI Bank, ITC, L&T, RIL, SBI, Tata Motors, Tata Power and Tata Steel.

Published on October 26, 2015

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