Exchange Traded Funds : An Empirical Analysis of Investor's Perception

Indian economy is transforming at a very rapid alacrity. In the wake of these swift changes, investment styles are also changing. There has been a tremendous increase in alternatives available to retail investors depending upon their risk appetite. The risk return needs have been analyzed by academicians all over the world and many innovative instruments have emerged to meet a variety of needs. Exchange traded funds (ETFs) is one of the innovation in Indian financial services scenario. The present study makes an attempt to reveal the retail investors' perception towards exchange traded funds. In order to analyze the perception, 100 respondents of Jalandhar district through non-probability judgmental sampling were surveyed. The survey revealed that awareness of ETFs among investors is very high and according to the investors, most alluring features of ETFs are diversification and risk reduction particularly. Also liquidity and capital appreciation come out to be the major factors affecting purchase behavior of investors towards ETFs