India's ETF industry crosses ₹10 lakh crore AUM as ETF apps gain attention

India’s exchange-traded fund (ETF) market has now exceeded ₹10 lakh crore in assets under management, highlighting a clear change in how investors in the country are constructing their portfolios. Retail participation was earlier centred mainly on traditional mutual funds, but ETFs are increasingly attracting attention from both first-time investors and more seasoned participants. The spread of mobile-based investment platforms has made ETFs easier to access, further supporting this shift. The discussion below explains the reasons behind rising ETF usage and how dedicated ETF apps are enabling this growth.

What is fuelling this expansion?

Index-oriented investing has become more popular in India over the past few years. Passive strategies that mirror benchmarks like the Nifty 50 or Sensex are drawing investors who want index-linked returns without the effort of selecting and monitoring active fund managers.

For many retail investors, ETFs can be easier to handle than actively managed schemes. This is largely because they usually come with lower expense ratios, follow a clearly defined and transparent strategy, and, unlike conventional mutual funds, are traded on stock exchanges throughout the day, offering live prices and direct execution.

The product universe has also widened significantly. Investors can now choose from gold ETFs, sector-specific ETFs, international ETFs, and debt ETFs, allowing them to spread exposure across multiple asset classes and risk levels. Rising awareness about diversification and the benefits of long-term investing has encouraged more investors to integrate ETFs into their overall portfolio strategy.

How ETF apps are influencing this trend

A key driver of ETF growth is the way the investment process has been digitised. ETF-focused apps allow users to search for different funds, examine tracking error, compare expense ratios, and execute buy or sell orders within a single mobile interface. Processes that earlier depended on intermediaries and slower settlement cycles can now be completed faster through these digital platforms.

For newer investors, this streamlined approach can be particularly convenient. Instead of researching individual stocks or evaluating multiple active fund managers, they can simply choose an index, invest a fixed amount periodically, and monitor their holdings on the same app.

Better digital access has contributed to higher ETF trading volumes on both the NSE and BSE.

Why this is important for long-term investors

ETFs provide a route to diversified market exposure while keeping costs and concentration risk relatively low. They typically offer low fees, are regulated by SEBI, provide intraday liquidity, and cover a broad spectrum of indices.

The sharp rise in ETF AUM indicates that investors have been steadily moving towards passive products over the last few years. This trend appears to be a long-term behavioural change in retail investing rather than a temporary phase, with user-friendly digital platforms playing a central role in enabling this transition.

Key factors to evaluate in an ETF app
All stock or investment apps do not provide the same depth of access or analytical tools. When deciding where to transact in ETFs, investors may want to assess aspects such as:

- Availability of real-time market data and live NAV indicators so they can closely track fund performance.
- Low brokerage charges on ETF trades, as these costs can meaningfully influence long-term returns.
- A broad selection of ETFs across equity, debt, commodities, and other segments to align with different investment needs.
- Clear portfolio dashboards and performance reports to help with ongoing monitoring and review.
- Strong and reliable order execution, especially during periods of heavy market activity.

Additional features like comprehensive fund details, side-by-side comparison tools, and intuitive app design can further enhance the investing experience. Over longer horizons, even modest differences in brokerage, tracking quality, or execution efficiency can have a noticeable impact on portfolio outcomes.

Conclusion

The Indian ETF landscape has expanded rapidly, underscoring growing demand for low-cost, diversified investment solutions. As more investors adopt passive strategies, ETF apps are becoming an important gateway for accessing these products. Platforms such as 5paisa are contributing to this evolution by offering a wide ETF menu, live market information, portfolio monitoring features, and competitive brokerage within a single application. As the ETF ecosystem matures, investors are likely to prioritise factors like ease of use, transparency, and dependable execution when choosing the platforms through which they manage their ETF investments.

This article is part of a promotional consumer-connect initiative and has been created by the brand, with Mint not taking editorial responsibility for its content.

The information provided is intended only for general awareness and should not be treated as financial advice.

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