India's ETF AUM jumps 5.5x in 5 years, Retail folios surge 11x: Zerodha Fund House
India's ETF market has seen significant growth in the last five years. Assets under Management increased more than fivefold. Retail investor participation also surged. ETF share in the mutual fund industry nearly doubled. The number of ETFs has tripled, with new categories introduced. Trading activity has risen sharply, indicating improved liquidity. Equity ETFs remain the dominant category.
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India's exchange-traded fund (ETF) market has undergone a major transformation over the past five years, with assets under management (AUM) rising more than 5.5 times and retail investor folios jumping nearly 11-fold, according to a new study by Zerodha Fund House As of March 2025, ETFs accounted for Rs 8.38 lakh crore in AUM, up from Rs 1.54 lakh crore in March 2020. This means ETFs now represent a 13% share of India's Rs 65.74 lakh crore mutual fund industry—nearly double the 7% share held five years ago.Retail participation has been a key growth driver. The number of retail folios surged from just 23.22 lakh in March 2020 to 2.63 crore by March 2025—an 11-fold increase. Retail AUM also more than tripled during the period, rising from Rs 5,335 crore to over Rs 17,800 crore.More than 97% of ETF folios are held by retail investors, reflecting growing awareness and acceptance of ETFs as a viable long-term investment option.India's ETF universe has also expanded significantly in terms of product offerings. The number of ETFs has nearly tripled since 2020, driven by the introduction of new categories such as silver-backed commodity ETFs launched in 2022. This diversification has broadened the appeal of ETFs for both retail and institutional investors.ETF trading activity has risen sharply alongside investor interest. Total trading volume grew from Rs 51,101 crore in FY20 to Rs 3.83 lakh crore in FY25—a more than sevenfold increase. Notably, trading volumes more than doubled in just the last year, underscoring improved liquidity in the segment.Equity ETFs remain the dominant category, consistently accounting for around 80% of total ETF AUM over the past five years. Their sustained popularity highlights the role of ETFs in offering low-cost, diversified exposure to Indian equity markets.Despite the rapid growth, India's ETF space remains small compared to global peers. As of March 2025, global ETF assets stood at over USD 15 trillion across nearly 14,000 ETFs. In 2024 alone, global ETF inflows hit a record USD 1.9 trillion. In contrast, India accounts for just under 2% of the global total.'This study highlights a new era for Indian ETFs, marked by surging retail participation and expanding product diversity, as reflected in rising volumes,' said Vishal Jain, CEO of Zerodha Fund House.
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