"INVESTORS' PERCEPTION TOWARDS EXCHANGE TRADED FUNDS (ETFS), THEIR POPULARITY AND ADVANTAGES: A STUDY WITH RESPECT TO BENGALURU URBAN"

The Indian ETF industry has grown from 6 ETFs in 2007 to 66 in 2018 at 28% CAGR over a 11 year period. AUMs grew 10x in the last three years from Rs. 8900 crores to 89,500 crores as of October 2018 over a period of 3 years. Government of India is using the easier ETF route to raise money as a part of disinvestment strategy (Aruna Polisetty, et al., 2019). CPSE ETF a flagship product launched in March 2014 was oversubscribed and excess Rs. 1363 crores was refunded as the issue size was limited to Rs. 3000 crores. The very introduction of new ETF categories - Debt ETF and smart Beta BTFs or ETF 2.0 are picking up trade and this speaks about financial market is joining the matured market league. Purpose: The purpose of the study is to highlight the factors driving perceptions of respondents towards investment, analyse the reasons behind popularity of ETFs. The various advantages of ETFs are also studied in detail. The study intends that ETFs can be more popularised through investors camps, simplified products, lower tax treatment which further encourage more investors to try ETFs. Design / approach: A structured closed ended questionnaire was administered as schedule in order to avoid delay, non-response and the fear of Covid-19 pandemic. A total of 115 questionnaires were in the hand and out of 115 only 100 are usable one forming 86.95% success rate. Chi-square, contingency co-efficient, ANOVA, Garrett ranking technique and weighted average statistical tools were performed for the present study analysis. Findings: All the socio-economic characteristics showed significant relation with ETFs investment and the contingency coefficient reveals high degree of relationship between socio-economic characteristics and investments in ETFs. Investors perception towards ETF investment are measured and presented by using weighted average technique. Future prospects, multiplication of money and wealth creation, are the investors perception which are ranked respectively on the basis of strength of WA. The study also reveals about reasons behind the popularity of ETFs and they include increased demand for low cost products like ETF, cost efficiency, convenience of exchange trading and transparency. The study also reveals about advantages of ETFs wherein these advantages are measured by applying Garrett Ranking Technique. Implications: The study will be useful to the investors and policy makers. There exist strong relationship between the socio-economic characteristics and investments in ETFs. The study reveals high degree of relationship between the characteristics and investments in ETFs. The buoyancy in demand enhanced when the government of India selected the ETF route for disinvestment. However, through proper conduct of investors meet, simplification of products, lower tax treatment and lower expenses would encourage more investors to invest in ETFs