Several ETFs set to hit market soon

K. R. Srivats New Delhi | Updated on January 24, 2018 Published on March 29, 2015

It could rain Exchange traded funds (ETFs) in the market soon as different fund houses line up innovative variants to this instrument that is gaining popularity in the country.

ETFs have been a big draw among retail investors in the last one year as they understood the primary benefits of diversification, risk control and lower transaction costs provided by this financial instrument. 

At least four-to-five ETFs could hit the market in next few months including some interesting ones that are intended to tap inflows from foreign portfolio investors (FPI), say market watchers.   

On the anvil are ETFs based on the MSCI India Domestic index and two fund houses -- Edelweiss Mutual Fund and Reliance Mutual Fund -- have filed offer documents for launching such product.

Indications are that Edelweiss ETF based on MSCI India Domestic index will get listed at the National Stock Exchange.

With the MSCI indices enjoying high degree of comfort among foreign fund managers, it is reckoned that that the ETF designed around the newly created MSCI India Domestic Index will find good interest among foreign fund managers.

"An ETF based on the MSCI India Domestic Index, will get our investors a wider representation of the Indian Market" says Vikaas M Sachdeva, Chief Executive Officer of Edelweiss Asset Management.

MSCI India Domestic Index is designed to represent the performance of the domestic India market, based on the MSCI Global Investable Market Indexes methodology.

There are no limits to the number of stocks in this index and helps capture wider market capitalisation to the extent of say 85 percent, as against 70 percent captured by Nifty index (which has 50 stocks).

The other fund houses which have lined up new ETF products include Kotak and SBI besides Reliance

Building on the success of its CPSE ETF last year, the Central Government is also toying with the idea of an ETF product as part of its divestment programme, sources said.

There has been an exponential growth in assets under management of existing 29 equity ETFs listed in India. From a level of Rs 927 crore as at end March 2014, the assets under management has grown to Rs 6282 crore as at end February 2015.

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Published on March 29, 2015
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