ETFs are now the largest MF in terms of assets under management

Thanks to the increased retail interest and persistent institutional demand, exchange-traded funds (ETFs) have surpassed liquid funds to become the largest mutual fund type in terms of assets under management (AUM), The Economic Times has reported.

According to data from the Association of Mutual Funds in India, the AUM of the ETF was Rs 3.6 lakh crore at the end of September 2021, roughly Rs 39,000 crore greater than liquid funds (AMFI). Over the last year, liquid funds had approximately Rs 80,000 crore greater AUM than ETFs.

As of September, there were 103 mutual fund schemes connected to the ETF, up from 71 two years before.

Exchange-traded funds

Over the last 12 months, ETF AUM has increased by 72%, roughly double the mutual fund industry’s AUM growth. As a result, the former’s proportion of total industry AUM increased by 250 basis points to 10% throughout the time.

In September, six lakh ETF folios were added, a new high and more than double the one-year average of 3.7 lakh folios. In a year, the total number of ETF folios more than doubled to 69.1 lakh. They now account for 60% of the total folios of large-cap funds, up from 30% a year earlier.

The average investment per ETF folio fell to Rs 5.3 lakh in September from Rs 12.5 lakh two years ago, indicating that individual investors are becoming more involved in a product that began as an
institutional offering.

The Employees’ Provident Fund Organisation (EPFO) has raised its equity exposure by using exchange-traded funds (ETFs).