The juggernaut of passive funds in India continues in full force. The assets continue to pile up month after month and quarter after quarter. It today accounts for 15 percent of all assets under management (AUM).
With the strict re-classification of active funds by SEBI in 2018, it is only passive space and within that it is specifically the exchange-traded fund (ETF) basket where there is any scope of innovation left.
So, why is thematic innovation important? As an investor, is there an edge it can give you? How have global investors reacted to this?
To discuss this CNBC-TV18 spoke to Luis Berruga, CEO, Global X and Swarup Mohanty, CEO, Mirae Asset. Global X is a part of the Mirae Asset Financial Group - one of their ETF arms with presence in Europe, Asia and Latin America managing assets of $545 billion dollars as of June end.
Berruga said that there are two main global trends going on right now. One is the growth of the ETF industry and the other is the growth in thematic investing.
He added, “Just in the US five years ago, there were only like $5 billion tracking thematic ETFs. That number today is $120 billion. So, we expect growth in the ETF industry to increase over the coming years. More specifically, some of the trends in which we are very interested right now are cybersecurity and electric vehicles.”
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