India’s ETF AUM grows more than 5x in 5 years, retail folios surge 11x: Zerodha Fund House

The total AUM of ETFs has grown by close to 5.5x over the last 5 years from March 2020 to March 2025, as per the latest study by Zerodha Fund House. As of March 2020, the retail investor AUM was about Rs 5,335 crore, and in the 5-year period, as of March 2025, the AUM has crossed more than Rs 17,800 crore. The number of retail investor folios in ETF schemes has seen significant growth, reaching about 2.63 crore as of March 2025, a substantial rise from 23.22 lakh in March 2020, marking more than a tenfold expansion in retail participation.

As per the report, more than 97% of all ETF investor folios are from the retail segment. The fund house also says that ETFs capture 13% of India’s Mutual Fund Industry, up from 7% in 2020, but India’s ETF universe is still nearly 2% of all global ETFs.

Other findings include that trading volumes of ETFs have more than doubled in a year in India, from Rs 51,101 crore in FY 2019-20 to Rs 3.83 lakh crore in FY 2024-25, marking an increase of more than 7 times. In fact, it has also more than doubled in the last 1 year. Higher liquidity is a significant advantage for investors, as it generally allows for smoother and more efficient trading. The report states that trading volumes vary across different ETF asset classes.

Nearly 80% of the ETF AUM is driven by equity ETFs. This number has roughly remained around 80% on average over the last 5 years from March 2020 to March 2025. The consistent share for Equity ETF AUM indicates a preference for equity investments through the ETF route, highlighting the effectiveness of these instruments for gaining exposure to the stock market.

The report also suggests that the total number of ETFs is up by nearly 3x in 5 years. The near tripling of the total number of ETFs available in India reflects a significant increase in the variety of investment instruments. This expansion includes the introduction of new commodity ETFs backed by silver in 2022, broadening the options available to investors.