NSE to consider ETF based on various asset classes: Chitra Ramkrishna
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NSE to consider ETF based on various asset classes: Chitra Ramkrishna

"Even though equity remains the dominant asset class in terms of ETF, globally there is an increasingly trend towards fixed income and commodities."

 Jinsy Mathew   
  • October 27, 2015  
  • |  
  • UPDATED   11:28 IST
Chitra Ramkrishna, Managing Director and Chief Executive Officer of National Stock Exchange

In a move to tap into the increasing investor interest in exchange-traded funds (ETFs), Managing Director and Chief Executive Officer of National Stock Exchange (NSE), Chitra Ramkrishna said that the exchange is planning to launch new ETFs based on various asset classes like fixed income and commodities.

Broader indices are another option being considered for the same route.

While speaking at the India ETF Conference organized by NSE, Ramkrishna said, "Even though equity remains the dominant asset class in terms of ETF, globally there is an increasingly trend towards fixed income and commodities."

Keeping in view the global environment, "NSE has taken several initiatives to launch ETF products in India and abroad. From here on we expect interests and inflows in India to grow manifolds. Soon we expect ETF sector too have Rs 1 lakh cr AUM," she added.

However, the path to this Rs 1 lakh cr AUM won't be easy was another fact acknowledged by the industry experts. Lack of awareness among the masses regarding the product was noted as one of the reasons for the slow expansion of the product. While speaking about the possible incentives, Ramkrishna from previous experience noted that incentives as a standalone won't work.

Currently, there are 11 equity ETFs on Nifty 50 in India and 6 ETFs on Nifty 50 which are listed in global markets. Offlate, ETFs have become popular as a financial instrument as they offer flexibility of a stock and protection of a fund. They are liquid, easy to use and can be traded on the exchanges just like a stock. Also, the expense ratio is much lower than an actively managed fund.