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Economic Times
14-05-2025
- Business
- Economic Times
Brokers nudge investors to park idle cash in Liquid ETFs
These ETFs primarily invest in overnight instruments like tri-party repo on government securities, treasury bills and reverse repos, making them relatively low-risk and high on liquidity. The growing popularity of liquid ETFs has prompted a flurry of new launches, especially by various brokers and financial services firms such as Angel, Mirae, Groww, Shriram, Bajaj Finserv and Zerodha. Most of these firms have both stock broking and mutual fund arms. Tired of too many ads? Remove Ads Tired of too many ads? Remove Ads Mumbai: Brokers are increasingly steering clients towards liquid exchange-traded funds (ETFs) to keep idle cash within their systems. Current regulations require brokers to transfer unutilised client funds back to their bank accounts at the end of every month. By encouraging investors to park this money in liquid ETFs - which trade like shares - brokers are able to avoid fund outflows and retain assets on their platforms. Over the last year, assets under management in liquid ETFs have risen 31%, from ₹17,200 crore to ₹23,550 growing popularity of liquid ETFs has prompted a flurry of new launches, especially by various brokers and financial services firms such as Angel, Mirae, Groww, Shriram, Bajaj Finserv and Zerodha. Most of these firms have both stock broking and mutual fund pitch is simple: Instead of transferring the share sale proceeds back to bank accounts - and then back to the broker account later - investors can now park the funds in liquid ETFs."As liquid ETFs trade in the same segment as equity, investors can seamlessly move from equity to cash and vice versa or even pledge as collateral for margin to the exchange," says Vishal Jain, chief executive officer, Zerodha Mutual Fund. For investors, this idle money can generate returns of 4-6%, higher than typical savings bank account Nifty 1D Liquid ETF, which has assets under management of ₹4,960 crore, has seen its average daily traded value on NSE rise nearly four-fold over the past year. Between February 1 and April 30, 2025, the average daily traded value stood at ₹109 crore, with the average trade size being ₹1.2 lakh. During the same period last year, the average daily volume was ₹28 crore, with the average trade size at ₹1.4 a debt product, liquid ETFs are not subject to Securities Transaction Tax (STT). To further boost appeal, many brokers have waived brokerage charges on the buying and selling of these ETFs."In an era of increasing competition, brokers need to generate higher returns for investors," says Piyush Chandra, head - mutual funds at IIFL Capital. "This product generates some return, rather than money lying idle in the ledger."These ETFs primarily invest in overnight instruments like tri-party repo on government securities, treasury bills and reverse repos, making them relatively low-risk and high on liquidity.
Time of India
14-05-2025
- Business
- Time of India
Brokers nudge investors to park idle cash in Liquid ETFs
Mumbai: Brokers are increasingly steering clients towards liquid exchange-traded funds (ETFs) to keep idle cash within their systems. Current regulations require brokers to transfer unutilised client funds back to their bank accounts at the end of every month. By encouraging investors to park this money in liquid ETFs - which trade like shares - brokers are able to avoid fund outflows and retain assets on their platforms. Over the last year, assets under management in liquid ETFs have risen 31%, from ₹17,200 crore to ₹23,550 crore. The growing popularity of liquid ETFs has prompted a flurry of new launches, especially by various brokers and financial services firms such as Angel, Mirae, Groww, Shriram, Bajaj Finserv and Zerodha. Most of these firms have both stock broking and mutual fund arms. Their pitch is simple: Instead of transferring the share sale proceeds back to bank accounts - and then back to the broker account later - investors can now park the funds in liquid ETFs. Play Video Pause Skip Backward Skip Forward Unmute Current Time 0:00 / Duration 0:00 Loaded : 0% 0:00 Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 1x Playback Rate Chapters Chapters Descriptions descriptions off , selected Captions captions settings , opens captions settings dialog captions off , selected Audio Track default , selected Picture-in-Picture Fullscreen This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Opacity Opaque Semi-Transparent Text Background Color Black White Red Green Blue Yellow Magenta Cyan Opacity Opaque Semi-Transparent Transparent Caption Area Background Color Black White Red Green Blue Yellow Magenta Cyan Opacity Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Drop shadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Best MF to invest Looking for the best mutual funds to invest? Here are our recommendations. View Details » by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like This might be relevant for you Undo "As liquid ETFs trade in the same segment as equity, investors can seamlessly move from equity to cash and vice versa or even pledge as collateral for margin to the exchange," says Vishal Jain, chief executive officer, Zerodha Mutual Fund. For investors, this idle money can generate returns of 4-6%, higher than typical savings bank account interest. Agencies Zerodha's Nifty 1D Liquid ETF, which has assets under management of ₹4,960 crore, has seen its average daily traded value on NSE rise nearly four-fold over the past year. Between February 1 and April 30, 2025, the average daily traded value stood at ₹109 crore, with the average trade size being ₹1.2 lakh. During the same period last year, the average daily volume was ₹28 crore, with the average trade size at ₹1.4 lakh. Live Events As a debt product, liquid ETFs are not subject to Securities Transaction Tax (STT). To further boost appeal, many brokers have waived brokerage charges on the buying and selling of these ETFs. "In an era of increasing competition, brokers need to generate higher returns for investors," says Piyush Chandra, head - mutual funds at IIFL Capital. "This product generates some return, rather than money lying idle in the ledger." These ETFs primarily invest in overnight instruments like tri-party repo on government securities, treasury bills and reverse repos, making them relatively low-risk and high on liquidity.
Time of India
12-05-2025
- Business
- Time of India
Fintech AMCs seize a bridgehead in asset management market
Tired of too many ads? Remove Ads Tired of too many ads? Remove Ads Tired of too many ads? Remove Ads New generation fintech asset management companies (AMCs) have grown their assets under management (AUM) in the last one year swimming against the tide in a sector dominated by banks and traditional wealth management the broader slowdown in the mutual fund industry did take out the wind from the sails in the last quarter for the likes of Groww Mutual Fund Zerodha Fund House and Navi Mutual Fund , these fintechs grew between 10 to 50% every MF doubled its AUM in the last one year closing March 2025 with Rs 1,547 crore in AUM. While it reported a flat growth in the March quarter, between September and December quarters its AUM grew 46%, data Zerodha grew its assets base almost nine times between March 2024 and 2025, reaching Rs 4,854 crore. Between September and December quarters, it grew at 46% and over the next quarter it grew only 26%.For Navi MF, AUM grew at 1.7% between December and March from almost 6% between October and December. Navi MF is at Rs 7,120 crore up 44% from just shy of Rs 5,000 crore a year to Association of Mutual Funds of India (AMFI) data, equity inflow into mutual funds in March stood at Rs 25,082 crore, an 11-month low. Between March 2024 and 2026, the overall assets in the mutual fund industry jumped 21.2% to Rs 66 lakh crore from around Rs 55 lakh crore.'Since the time of our launch in Dec 2023, we have seen strong AUM growth hitting Rs.6,500 crore across 7 lakh investors," said Vishal Jain, chief executive officer, Zerodha Fund HouseOther than Zerodha Fund House, which got a fresh licence, both Navi and Groww entered this space by acquiring two existing mutual fund companies. Navi acquired Essel Mutual Fund in February 2021, while Groww closed the acquisition of IndiaBulls AMC in May 2023. Recently Angel One and CapitalMind also bagged licences to start the mutual fund Amfi report from February this year said by 2047 India will have around 200 AMCs with AUM set to cross Rs 350 lakh crore. For fintechs, which were mostly focusing on stock broking and mutual fund distribution, the entry into the AMC business is an attempt to grab a share of this expanding wealth pie.'Investors look for trust and that gets built by large AUMs or strong distribution. Fintechs will need to build that trust which will take time, or they will have to innovate on distribution and products,' said Manish Kothari, cofounder, ZFunds, a mutual fund distribution players like Groww, Zerodha and Angel One, leaders in the stock broking sector, the AMC licence is the trump card for diversification in the financial services business that can bring in more stability to their overall revenues. And going by the overall slowdown in the equity markets, their stock broking businesses have also seen a certain degree of stagnation in their active user count reported by reported 12.9 million active users as of March end, compared to 12.5 million in October 2024, reflecting the churn and the slow addition of new investors. Zerodha's 8 million active traders in March end has also remained somewhat stable compared to 7.8million in October 2024.'There has been a slowdown in the overall market, which is reflected in the larger mutual funds industry as well, so for these fintechs, a lot is riding on their newly formed AMC business for stability and future business growth,' said another founder of a mutual fund distribution startup on the condition of the AMC business is a long-term game plan for these startups, industry insiders agree that creating a dent in this market would depend on instance, Bajaj Finserv , which got the AMC licence in 2023, has created an AUM of Rs 20,133 crore in March 2025 from Rs 8,800 crore in March 2024.'Groww is trying to build an offline presence of their mutual fund business. They have set up offices in certain cities already and the plan is to set up more,' said the founder quoted above. Despite being a tech-first stock broker for the AMC business, the Peak XV Partners-backed startup is opening up offline distribution did not respond to queries.'There are 44 AMCs and everyone has a Nifty product, a flexicap fund, a large cap fund, so these startups will need to differentiate from the traditional players with very innovative products, retail investors still use AUM size as a major filter to choose from,' Kothari of ZFunds broking, where customers are using the platform only through a transactional relationship, in case of the engagement with the AMC business, it is a long term trust based investment play.
