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SINGAPORE, June 15 (Reuters) iShares MSCI India, which tracks the MSCI India Index, debuted on the Singapore stock exchange on Thursday, one of several new Exchange Traded Funds (ETF) that compete with traditional unit trusts and could drive down costs for investors.

Managed by Barclays Global Investors, part of Barclays Plc., iShares MSCI India is the eighth ETF -- an index fund that trades like a stock -- to trade in Singapore.

The growing popularity of iShares Exchange Traded Funds might pressure banks to cut sales charges for traditional funds, Robert Haber, vice-chairman of BGI Asia ex-Japan, told reporters at the start of trading of the new ETF.

''I think there will be some pressure for some of the more index-like products to have those sales charges come down a little bit,'' Haber said, adding that sales charges for traditional funds in the United States have halved amid growing demand for ETFs.

''A lot of sales charges were in the neighbourhood of 2-3 percent. Now we're starting to see them at 1 percent, 1.5 percent across the U.S.,'' he said.

ETFs allow investors to get exposure to a region or sector without having to own the underlying index components and are one of the fastest-growing products in the fund business.

Bought and sold through brokers, ETFs are a cheaper investment alternative to traditional funds as investors do not have to pay front-end charges.

Hedge funds typically charge annual management fees of 1-2 percent and up to 20 percent of any performance above a pre-set target such as a money market interest rate.

MORE ETFs TO COME BGI said earlier this month it had pulled in about $45 billion of new money to its iShares ETFs in 2006 worldwide -- as much as it attracted in the whole of 2005.

iShares -- currently listed in 14 markets -- accounted for 80 cents of every dollar flowing into ETFs in the U.S. in 2005, BGI said.

BGI, which manages $1.5 trillion of assets, is the largest investment manager in the world, according to Global Investor magazine. It has 47 percent of the global ETF market, Morgan Stanley figures showed.

Given the strong demand for ETFs, Haber reiterated Barclays Global Investors' plans to launch up to four new iShares in emerging markets in Asia by the year-end.

Singapore Exchange, Southeast Asia's largest bourse, also plans to launch up to three more ETFs by year-end, said Linus Koh, Singapore Exchange executive vice-president and group head of products and services.

Fund managers say the soaring demand for ETFs in Asia is a sign of a maturing Asian fund industry and does not necessarily threaten the traditional fund sector.

''It would help to remove the very average fund managers,'' said Winson Fong, chief investment officer at SG Asset Management which manages $2.3 billion in Asia Pacific ex-Japan.

Fund managers said that as most iShares ETFs track market indices and do not require active management, they target a different segment of investors compared to traditional funds.

''If they want advice, then they're going to have to pay for advice,'' said Lindsay Mann, the head of First State Investments' arm in Asia which oversees $5 billion worth of funds.

Moreover, fund managers said the growing class of cash-rich investors in Asia means there is room for more players in the private wealth management sector.

''The pie is getting bigger and bigger,'' said Fong, adding traditional funds could also consider offering clients products similar to ETFs. ''We could offer similar products, if you can't compete with them, join them.'' iShares MSCI India closed at $3.80, 2.2 percent above their debut price of $3.72.

(Additional reporting by Desmond Wong) REUTERS DKS DS1615