Mutual Funds Accelerate Launch of New Passive Investment Products

Why It Matters

The products give investors cost‑efficient access to high‑growth segments, potentially boosting ETF inflows and accelerating the shift from active to passive strategies in India’s market.

Key Takeaways

• SBI launches Nifty200 Value 30 and Nifty Smallcap 250 ETFs on May 7
• Value 30 ETF screens 30 Nifty 200 stocks on value metrics
• Groww’s Nifty Private Bank ETF tracks ten private‑sector banks
• Private banks’ deposit share rose to 38 % of total deposits

Pulse Analysis

Indian mutual‑fund houses are accelerating the rollout of passive exchange‑traded funds as equity markets show early signs of recovery. After a prolonged period of active‑management dominance, investors are demanding low‑cost, rules‑based exposure to benchmark indices. The Securities and Exchange Board of India (SEBI) has eased listing requirements, further encouraging ETF growth. This shift mirrors global trends toward ETFs, which offer liquidity, transparency, and tax efficiency, and signals a maturing domestic market capable of supporting a broader suite of index products.

SBI Mutual Fund will introduce two ETFs on May 7: the Nifty200 Value 30 and the Nifty Smallcap 250. The Value 30 tracks 30 stocks from the Nifty 200 screened for low earnings‑to‑price, book‑value‑to‑price, sales‑to‑price ratios and dividend yield, while the Smallcap 250 follows the broader small‑cap universe. Both funds expand SBI’s passive catalog and are priced with expense ratios under 0.20 %, giving investors a cost‑effective, fundamentally‑screened route to capture long‑term growth in value and small‑cap segments.

Groww Mutual Fund’s new Nifty Private Bank ETF provides a transparent, rules‑based vehicle to access India’s fast‑growing private‑banking sector, which now holds roughly 38 % of total deposits, up from 21 % a decade ago. The index comprises ten private‑sector banks weighted by free‑float market capitalisation, offering investors exposure to a niche yet increasingly profitable segment with average dividend yields above 5 %. By adding this product, Groww taps into demand for sector‑specific passive strategies and diversifies the Indian ETF landscape.