Exchange Traded Funds (ETFs) are gaining ground as investment vehicles, given their low cost structure and the better returns of actively managed programs. Over the past five years, assets under management (AUM) of ETF schemes have grown more than 30-fold to reach Rs 1.47 trillion. While ETFs still only represent a small fraction of total assets, market participants say the share of passive investment vehicles will only grow in the years to come. In addition, the market is expected to grow as more and more programs are launched in the debt segment. In some developed countries, debt ETFs represent a larger share of the total ETF market. In India at present it is only 2%. On the equity side, experts say investors may increasingly prefer ETFs over actively large-cap programs, as the performance dashboard in recent years has favored the former.
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First published: Tue 19 November 2019 01:32 IST