Nifty in global expansion mode! BlackRock launches Nifty ETF in Japan

Blackrock Japan has launched a new ETF on India's benchmark index- Nifty50, which will be another addition for the passive funds, besides the existing four tracking the NSE's barometer. NSE chief Ashish Kumar Chauhan informed about the same through a post on social media site X (formerly called Twitter).
 

“Happy to share that Blackrock Japan has launched an ETF on Nifty 50 in the month of June 2024. In the current Financial year, four new passive funds tracking Nifty indices launched in international markets (3 in Japan and 1 in South Korea),” Chauhan said in his post.

 

https://x.com/ashishchauhan/status/1800925872528003463

 

Seven passive funds were launched in Japan and South Korea in the year 2023, which tracked Nifty indices. Out of them, half a dozen funds tracked Nifty 50, while the remaining one tracked the Nifty50 2x leverage index. These seven funds had an asset under management of $550 million.
 

Market experts said that these developments signal a surge of foreign confidence in the Indian economy and its capital markets. Increased foreign participation can enhance liquidity, potentially leading to smoother trading and reduced transaction costs but may push the valuations higher.
 

The recent launch of a Nifty 50 ETF by BlackRock Japan, alongside similar offerings in international markets, signifies a burgeoning interest in Indian equities. This influx of foreign investment presents a positive outlook for the Indian stock market, said Sonam Srivastava, Founder and Fund Manager at Wright Research.
 

"Heightened demand for Indian stocks has the potential to elevate valuations. From a broader perspective, this trend could culminate in the inclusion of the Indian market within a wider range of global investment indices, further solidifying its international standing and attracting additional capital," he said.
 

As of December 2023, 21 passive funds tracked Nifty indices outside India. These products were launched by large asset managers, including iShares Blackrock, DWS, First Trust, Nomura AMC, and Mirae Asset Global Investments and more.
 

Currently, there are about 16 ETFs track Nifty50 in India. These ETFs had an asset under management of Rs 2.61 lakh crore as of May 31, 2024. Around 14 passive schemes have completed one year of existence in the market and given an average return of 26.78 per cent in the same period.
 

The Indian stock market reached a new milestone of $5 trillion in May. It is the fifth largest stock market globally behind Hong Kong, Japan, China, and the US. On Thursday, June 16, the total market capitalization of all BSE-listed companies zoomed to Rs 432 lakh crore.

 

 

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