Whalesbook
India's ETF Market Surges Past ₹10 Lakh Crore AUM Milestone
India's exchange-traded funds (ETFs) have reached a significant financial milestone, surpassing ₹10 lakh crore in assets under management (AUM) as of October 2025. This remarkable achievement represents a doubling of the market size within a span of just three years, underscoring the rapidly growing importance of ETFs in the nation's capital markets. The surge in managed assets is mirrored by a dramatic increase in trading activity and investor participation, signaling a profound shift in investment trends across India.
The Growth Engine: AUM, Volumes, and Investors
Data released by Zerodha Fund House highlights the explosive expansion of the ETF segment. The total AUM doubled, reaching the ₹10 lakh crore mark by October 2025. Market activity has kept pace, with ETF trading volumes witnessing an impressive seven-fold increase. Volumes surged from ₹51,000 crore in fiscal year 2020 to ₹3.83 lakh crore in fiscal year 2025. The momentum has continued into fiscal year 2026, with trading volumes in the first half exceeding ₹3.2 lakh crore, nearly matching the entire previous fiscal year's total. This indicates heightened liquidity and broader investor engagement.
The number of individuals investing in ETFs has also seen a substantial uplift. ETF investor accounts, or folios, grew from approximately 41 lakh in November 2020 to over 3 crore by November 2025. This meteoric rise is largely attributed to the increasing availability of diverse ETF products and the widespread adoption of digital investment platforms.
Equity Dominance and the Rise of Precious Metals
Equity Exchange Traded Funds continue to command the largest share of the market. Over the past year alone, they attracted around 25 lakh new folios, reflecting sustained investor interest in stock market-linked instruments. However, a notable trend is the growing appetite for non-equity ETFs. Gold and silver ETFs, in particular, have experienced a significant surge in popularity.
As of November 2025, these precious metal ETFs collectively accounted for nearly 15% of the total ETF AUM. The asset growth within these specific categories has been extraordinary. Gold ETFs saw their AUM double to over ₹1 lakh crore, while silver ETFs experienced a four-fold increase, surpassing ₹49,000 crore. Investor account growth mirrored this trend, with gold ETF accounts rising 1.5 times and silver ETF accounts increasing by a remarkable 4.5 times over the past year.
Official Statements and Future Outlook
Vishal Jain, chief executive officer of Zerodha Fund House, commented on the ₹10 lakh crore AUM milestone. He stated that it signifies a crucial phase in the development of the ETF market. Jain highlighted the wider acceptance of ETFs across various asset classes as a key driver. Zerodha Fund House is a joint venture between Zerodha Broking Ltd. and CASE Platforms Pvt. Ltd., entities known for their innovation in the Indian financial technology space.
This growth trajectory suggests that ETFs are becoming increasingly integral to the Indian investment landscape. Their accessibility, transparency, and lower cost structures compared to actively managed funds make them attractive options for a growing segment of investors. The continued expansion is expected to further deepen domestic capital markets and offer more diversified investment opportunities.
Impact
The burgeoning ETF market has a significant impact on Indian investors by providing more accessible, diversified, and often lower-cost investment options. For the broader Indian stock market, this growth enhances liquidity, encourages greater retail participation, and can lead to more efficient price discovery. It also challenges traditional mutual fund products, potentially driving innovation and fee reductions across the industry. The increasing popularity of gold and silver ETFs might also influence domestic commodity prices and investment patterns.
Impact Rating: 8/10
Difficult Terms Explained
- Assets Under Management (AUM): The total market value of all the investments that a financial institution, such as a mutual fund or ETF provider, manages on behalf of its clients.
- Exchange Traded Funds (ETFs): Investment funds that are traded on stock exchanges, much like individual stocks. They typically track an index, sector, commodity, or other asset.
- Folios: An account number or record that represents a single investor's holding in a mutual fund scheme or ETF.
- Fiscal Year (FY): A 12-month period for accounting and financial reporting purposes. In India, the fiscal year runs from April 1 to March 31.