ETFs: Types Available in India

In the last article, we learned about the different types of ETFs. In a developed economy like the USA, many types of ETFs are available. But as the ETF market is developing in India, there are only a few types of ETFs available in the country. 

So let’s summarize the types in a table for easy understanding.

ETF Availability Mapping:

As you can see, there are very few categories currently available in Indian markets. For some categories, liquidity will be low. So you have to perform the due diligence before buying or selling any ETF.

Our wish list for ETFs

While ETF availability has improved drastically in India, here is a wishlist for ETFs that we would like to have in India

• Options for ETFs tracking small-cap indices and wider sectoral coverage.
• More options for smart-beta ETFs. Specifically, we would like to see more multi-factor ETFs.
• More options for international ETFs with wider geographical and asset class coverage.
• More options for bond ETFs with corporate bond ETFs and constant maturity options beyond G-Secs.
• Wider coverage of commodities beyond Gold and Silver.

Using ETFs as an investment option, we can take exposure to various asset classes and can invest in diversified portfolios. These reasons are making ETFs more and more popular among Indian retail investors. Currently, the ETF market is dominated by institutional investors as they own more than 90% of ETF assets. But with increasing awareness and adoption, retail participation will surely increase in the future.

In the next article, we will focus on smart-beta ETFs and understand them in greater detail.

FAQs

In India, what types of ETFs are available?

There are several types of ETFs available in India, including equity ETFs, debt ETFs, gold ETFs, and international ETFs.

What are the benefits of investing in ETFs?

ETFs provide investors with several benefits, including diversification, low costs, flexibility, and higher liquidity.