This Issue - Icwai

CAPITAL CAPITAL MARKET
MARKET
From Fig. 6 the top holding of the funds, Power
Shares India Portfolio ETF, are the profitable
companies’ shares.
Source : http://www.invescoposwershares.com/products/
overview.aspx?ticker=PIN#perfchart
Fig. 7
The major concentration of this fund is Energy
Sector. India being an emerging economy, one of the
fastest growting sectors along with banks and
automobile industry is the energy sector.
Source : http://www.invescopowershares/com/products/
overview.aspx?ticker=PIN#perfchart
Fig. 8
As the above figure compares the movement of
few indexes along with the ETFs, it clearly indicates
that the movement of the fund Powershares India
Portfolio ETF is almost the same as Sensex, S & P 500
Index, Indus India Index and MSCI India Index.
Conclusion
Worldwide, there are 2,557 ETFs with 5802 listing
and assets of USD 1,367.4bn from 140 providers on 48
exchanges around the world according to BlackRock’s
latest report. The growth of an ETF has been
Source : BlackRock ETF Landscape 2010
Fig. 9
tremendous since it was first launched in 1993. This
number is a significant increase from just 130 ETFs in
2002.
In India, first gold ETF was launched by
Benchmark Asset Management Fund in 2007. Since
then there were several companies which issued
variety of gold funds focused on ETF market. India
has eight gold ETFs currently listed with a total
collection of more than 11 tonnes, nearly double
compared to last year.
According to recently released report by BlackRock
ETF Landscape, ETFs have grown by 33.2%, compounded
annually, globally in the past 10 years and
26.1% in the past five years. But India ETFs have not
taken off well till date. Accoding to Association of
Mutual Funds of India (AMfi) ETFs comprise 0.3%
of total industry assets whereas in US it is 9% of
mutual fund Industry. As the commission in ETFs is
comparatively low as compared to shares and mutual
funds, probably that can be cited as major reason of
ETF being not very common in India.
With continuous reforms by SEBI in order to
protect retail investors and to give further investment
avenues, hopefully, Indian market will see a flood of
ETFs pouring in near future.
India is one of the fastest emerging economies
which have seen continuous reforms in stock market
by its regulator Securities Exchange Board of India
(SEBI) giving Indian market a new horizon of investment
avenues. Hopefully, we might see some reforms
for the betterment of the retail investors by SEBI. ❐
Referred sites
■ iShares S&P India Nifty 50 Index Fund (May 10, 2011).
Retrieved on May 10, 2011 from http://us.ishares.com/
product_info/fund/overview/INDY.htm
■ Powershares India Portfolio (May 10, 2011). Retrieved
on May 10, 2011 from http://www.invescopowershares.
com/products/overview.aspx?ticker=PIN#perfchart
■ Closed-end fund. (n. d.) Retrieved May 18, 2011 from
http://en.wikipedia.org/wiki/Closed-end_fund
■ James E. McWhinney, (n.d.) An Inside Look At ETF
Construction. Retrieved on May 18, 2011 from http://
www.investopedia.com/articles/mutualfund/05/
062705.asp
■ Tom Lydon. December 3rd 2010. Retrieved on May
18, 2011 from http://www.etftrends.com/2009/12/etfcreation-redemption-process-explained/
■ 1ST QUARTER ETF/ETP INDUSTRY REPORT FROM
BLACKROCK. (n.d). Retrieved on May 18, 2011 from
http://pr-usa.net/index.php?option=com_content&
task=view&id=707876&ltemid=31
774 The Management Accountant |September 2011