The number of retail investors investing in index funds has skyrocketed by 12 times in less than 4 years, according to a study by Zerodha Fund House. From just 4.95 lakh in March 2020, the total retail folios in index funds have now reached 59.37 lakh by December 2023, signifying a remarkable increase in the popularity of index funds among individual investors.
The assets under management (AUM) of index funds have also surged by 25 times, growing from around Rs 8,000 crore in March 2020 to approximately Rs 2,13,500 crore as of March 2024. Notably, debt index funds have shown significant growth as well, going from no AUM in March 2021 to an impressive Rs 1.1 lakh crore in March 2024, constituting 51.5% of the total AUM.
With retail investors increasingly opting for simple and transparent investments like index funds, Zerodha Fund House is proud to be a part of this growing trend. CEO Vishal Jain stated, “Nearly 11% of new folios last financial year came from index funds, showing that investors are confident in this passive investment strategy.”
The total number of index funds has also seen a substantial increase, from 44 in March 2021 to 207 in March 2024, showing a growth of 370%. Zerodha Fund House currently offers two index funds – Zerodha Nifty LargeMidcap 250 Index Fund and Zerodha ELSS Tax Saver Nifty LargeMidcap 250 Index Fund, which track the Nifty LargeMidcap 250 Index.
As of June 2024, the assets in the index funds category have reached a record high of Rs 2.43 lakh crore, marking a nearly 900% surge in the past three years. Index funds have witnessed the highest AUM growth among all mutual fund categories over the last 3 years, indicating a strong preference for passive investment options.
The growing popularity of index funds among retail investors is evident, and with the introduction of more equity and debt index funds by various mutual fund houses, this trend is expected to continue in the future. Join the index fund revolution today with Zerodha Fund House!
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