ETFs gain traction as retail folios rise nearly 11x in five years: Zerodha Fund House

While ETFs are still gaining traction in India, the segment has grown significantly, according to a new study by Zerodha Fund House.

Retail investor assets under management (AUM) in ETFs rose from Rs 5,335 crore in March 2020 to over Rs 17,800 crore by March 2025. The number of retail ETF folios also saw a big jump, from 23.22 lakh in 2020 to about 2.63 crore in 2025. The report notes that over 97 per cent of all ETF portfolios now belong to retail investors.

Growing market

Globally, the ETF market is massive. As of March 2025, nearly 14,000 ETFs were listed worldwide, with total assets under management (AUM) crossing $15 trillion. In 2024 alone, a record $1.9 trillion flowed into ETFs, the Zerodha Fund House report notes.

In India, ETF AUM has grown nearly 5.5 times over the last five years, from March 2020 to March 2025, indicating steady and sustained growth. As of March 2025, ETFs in India had a total AUM of Rs 8.38 lakh crore, making up about 13 percent of the overall mutual fund industry’s Rs 65.74 lakh crore AUM. This is a sharp rise from March 2020, when ETFs accounted for just 7 percent of the total.

Zerodha Fund House says this rapid expansion could have wider implications for capital markets, investment strategies, and how investors allocate their money going forward.

In the last five years, the report highlights that the total Number of ETFs in India 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,” the report says.

Nearly 80 percent of the ETF AUM is driven by equity ETFs, with this number roughly remaining around 80 percent 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 notes.

The trading volume of ETFs in India has also increased from Rs 51,101 crore in FY 2019–20 to Rs 3.83 lakh crore in FY 2024–25.

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