Increase in Corporate and Wealthy Investments in ETFs within India
The Indian ETF market has witnessed remarkable growth over the past few years, with investor interest surging significantly between 2021 and 2025. This growth is evident in the rising assets under management (AUM) and increasing returns in various Exchange-Traded Funds (ETFs).
According to the Association of Mutual Funds in India, the total ETF assets in India reached a record $107.82 billion in June 2025, marking a significant increase from $68.36 billion in 2023. This growth can be attributed to the increasing preference for ETFs due to their liquidity, transparency, and cost-effectiveness.
One of the standout performers in this growing market is the Nippon India ETF Hang Seng BeES, which had an AUM of around ₹900 crore as of August 2025. The fund has shown robust historical returns, averaging a Compound Annual Growth Rate (CAGR) of 7.95% since inception. Similarly, the Nippon India ETF Nifty PSU Bank BeES reported an AUM exceeding ₹3,000 crore by mid-2025, with a CAGR of 6.51% since inception.
Investors are not only focusing on equity ETFs but are also diversifying into commodity-backed ETFs like gold and silver. This trend is evident in the global uptrend in gold and silver ETF investments in 2025, with India being a large buyer of silver ETFs this year. This diversification reflects broader investment strategies adapting to inflationary pressures and market uncertainties, further supporting growth in the ETF market.
The corporate sector plays a significant role in the ETF market, with corporates holding the largest share of both equity and gold ETF assets. Corporate ETF portfolios increased from 39,358 in 2021 to 94,042 by June 2025, accounting for 87.22% of the total ETF assets. Corporates also hold the largest share of gold ETF assets, with $4.58 billion across 16,761 portfolios.
Retail and high net worth individuals (HNIs) are also active participants in the ETF market. Retail and HNI portfolios in non-gold ETFs stand at 20.5 million plus, up from roughly 5.34 million in 2021. Retail investors hold $605 million in Gold ETFs, a growth from 1.78 million portfolios in 2021 to 7.41 million. HNIs now hold $2.38 billion in Gold ETFs, a growth from 43,319 portfolios in 2021 to 228,700.
However, foreign institutional investors hold a negligible 0.00004% of ETF assets in India. This suggests that the Indian ETF market is primarily driven by domestic investors.
The ETF market in India is diverse, with 264 ETFs listed from 24 providers. This variety offers investors a wide range of investment options, contributing to the growing interest in the ETF market.
In conclusion, the Indian ETF market has shown consistent growth and evolving investor interest from 2021 to 2025. The combination of increasing AUM in major equity ETFs and increased interest in commodity ETFs indicates a strong upward trend in investor participation and market size during this period. The growing trend towards diversified ETF investments reflects a maturing market that is well-positioned for continued growth in the future.
[1] Nippon India ETF Hang Seng BeES: https://www.nipponindia.in/content/etfs/product/hang-seng-bees.html [2] Nippon India ETF Nifty PSU Bank BeES: https://www.nipponindia.in/content/etfs/product/nifty-psu-bank-bees.html [3] Global Trends in Gold and Silver ETF Investment: https://www.worldgoldcouncil.org/-/media/files/reports/gold-investment/2021/gold-demand-trends-q2-2021.pdf [4] India as a Large Buyer of Silver ETFs: https://www.bloombergquint.com/onweb/silver-etfs-are-buying-the-metal-back-from-india
[1] The strong performance of asset management products, such as the Nippon India ETF Hang Seng BeES, is a testament to the thriving finance sector in India's ETF market. [2] As more individuals and businesses investigate diversifying their investing portfolios to counter inflationary pressures and market volatilities, the commodity-backed ETF segment, including gold and silver ETFs, is expected to grow further, reflecting on the overall business environment.
