ETFs displace liquid plans, top AUM charts

ETFs displace liquid plans, top AUM charts

The exchange traded funds (ETF) have overtaken the liquid funds‘ segment to become the largest mutual fund category in terms of assets under management (AUM) thanks to growing retail interest and sustained institutional demand.

Their AUM was Rs 3.6 lakh crore at the end of September 2021, about Rs 39,000 crore more than that of the liquid funds according to the data from the Association of Mutual Funds in India (AMFI). On average, liquid funds had nearly Rs 80,000 crore more AUM than ETFs over the past year.

The number of mutual fund schemes linked to the ETF rose to 103 in September, compared with 71 two years ago.

The ETF AUM has risen by 72% over the past 12 months, nearly double the AUM growth of the mutual fund industry. Consequently, the former category’s share in the total industry AUM rose by 250 basis points to 10% during the period.

MF

The ETF folio addition in September was six lakh, a record level and double the one-year average of 3.7 lakh folios. The cumulative ETF folios more than doubled in a year to 69.1 lakh. They formed 60% of the total folios of large cap funds compared with 30% a year ago.

The average investment per ETF folio dropped to Rs 5.3 lakh in September compared with Rs 12.5 lakh two years ago reflecting the rising participation of retail investors for a product that initially took off as an institutional product.

Particularly, the Employees’ Provident Fund Organisation (EPFO) has increased equity allocation through the ETF route.

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