About Exchange Traded Funds (ETFs)
ETFs are just what their name implies: baskets of securities (Indices) that are traded, like individual stocks, on an exchange. Unlike regular open-end mutual funds, ETFs can be bought and sold throughout the trading day like any stock. ETFs have lower cost of transactions and annual changes compared to index funds. ETFs are considered a safer product for risk averse and first-time investors who want market linked returns.
The Exchange traded funds (ETFs) began their journey in India way back in 2002, when the first ETF by Nippon India Mutual fund (erstwhile Benchmark Asset Management Company Ltd) was launched in India on the Nifty 50 Index. The ETF was listed on NSE on January 8, 2002 and day one witnessed trading of Rs. 1.30 crores on NSE.
The journey to listing of the 100th ETF on NSE took more than 19 years. Last one-year period has seen a lot of activity in the ETF space, with 21 ETFs getting listed on NSE. The assets under management of ETFs in India is now at Rs. 3.16 lakh crores (end of May 2021), witnessing more than 13.8 times increase in five years, as compared to Rs. 23,000 crores (end of April 2016).