The Indian mutual fund industry witnessed a surge in Exchange-Traded Funds (ETFs) in 2024, with 31 new launches mobilising Rs 1,248 crore as per AMFI data. This boom in ETFs reflects the growing appetite for diversified, low-cost investment options that track various indices, offering investors sector-specific exposure, market capitalisation-based growth, and commodity-linked returns.
Among the prominent new ETFs, Bajaj Finserv Nifty 50 ETF and Bajaj Finserv Nifty Bank ETF launched in January 2024, aimed to mirror the performance of the NIFTY 50 and Nifty Bank indices, respectively. While the Nifty 50 ETF delivered a steady 12.47% return, the Nifty Bank ETF outperformed with a notable 15.16% since launch, appealing to investors seeking exposure to top banking stocks.
A top-performing ETF this year is the DSP Nifty Healthcare ETF, launched in February. With a remarkable 27.5% return since inception, it tracks the Nifty Healthcare Total Return Index, offering investors a strong foothold in India’s rapidly growing healthcare sector. This ETF appeals to those looking for long-term growth driven by increasing healthcare demand and innovation.
HDFC NIFTY PSU BANK ETF and LIC MF NIFTY MIDCAP 100 ETF are two other noteworthy launches, focusing on public sector banks and mid-cap stocks, respectively. While HDFC’s ETF, launched in January, has yielded an 11.86% return, LIC’s mid-cap-focused ETF brought in a return of 15.93%.
Investors also explored alternative assets and niche sectors. The Tata Gold ETF, launched in January, offered an impressive 22.23% return, reflecting the demand for safe-haven assets. Meanwhile, Mirae Asset Nifty Smallcap 250 Momentum ETF and Aditya Birla Sun Life Nifty PSE ETF focused on small caps and public sector enterprises. However, while the small-cap ETF performed well with a 14.62% return, the PSE ETF saw a slight dip of -2.6%.
Two unique additions were the Mirae Asset Nifty EV and New Age Automotive ETF and the SBI Silver ETF. The EV-focused ETF, introduced in July, targeted the electric vehicle and automotive sector but faced initial challenges, with a -5.03% return. The SBI Silver ETF, launched around the same time, aligned with the domestic silver prices, yet posted a marginally negative return of -2.16%, reflecting silver’s volatile nature.
In May, the Mirae Asset Nifty MidSmallcap400 Momentum Quality 100 ETF provided a blend of mid and small-cap stocks with a momentum strategy. Though relatively new, it has managed a modest return of 7.17%, appealing to investors seeking diversified exposure to growth-oriented stocks with high momentum.
In 2024, there was diversity in the ETFs launched —from sector-specific exposure in healthcare and banking to commodities like gold and silver. While certain ETFs outperformed, others experienced volatility, underlining the importance of careful selection based on investment goals and risk tolerance. With this expansion, investors now have a wider array of tools to construct resilient, diversified portfolios in alignment with India’s economic growth and sectoral developments.
Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.
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