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Indian fixed income ETF coming to LSE


Sun Global Investments Limited and ZyFin Holdings are to list an Indian fixed income ETF, the LAM Sun Global ZyFin India Sovereign Enterprise Bond UCITS ETF, on the London Stock Exchange (LSE) on 19 November.

The announcement comes as Indian Prime Minister Narendra Modi’s arrives in London, UK for a three-day visit designed to further strengthen financial ties between the two contries.
The LAM Sun Global ZyFin India Sovereign Enterprise Bond UCITS ETF will offer international investors exposure to a basket of Indian public sector corporate bonds. The fixed income ETF will be Europe’s first physically replicating Indian ETF backed by real underlying securities as opposed to notional securities or derivatives. 
Indian Sovereign Owned Enterprises (SOEs) are corporations of national interest which are 51 per cent owned or more by the Government of India. SOEs play a major role in India’s infrastructure development and include the Indian Railways, Power Finance Corporation and Rural Electrification Corporation of India. The launch of the Fund will for the first time allow foreign investors the opportunity to invest in these difficult-to-access but well researched AAA rated Indian companies. The UCITS compliant ETF provides exposure to corporate bonds which have an average duration of over 10 years and although partly state owned, yield higher than an Indian Sovereign Bond at around 7 per cent.
Mihir Kapadia (pictured), CEO at Sun Global Investments, says: “As a London–based FCA regulated company, we are very pleased to partner with ZyFin and work with the London Stock Exchange to provide global investors with an efficient way to invest in bonds issued by high-quality Indian state-owned companies.  This venture shows the versatility, creativity and flexibility of the financial sector in London and the investment opportunities available as a result of the rising economic growth in India.
Innovation is at the heart of our business which is why we are able deliver unique opportunities such as the new Indian SOE bond fund ETF which offer such low-risk, high-return investments.
“The listing of this fund reflects our view that Indian nominal yields are among the highest in the world. With India expected to overtake China next year as the world’s fastest growing economy, we are confident that new investments innovations such as ours will help reinforce its growth trajectory.”
Sanjay Sachdev, Executive Chairman at ZyFin, says: “This is the first time global investors will have access to AAA rated government owned Indian companies through an exchange traded fund and with the Indian government keen to stimulate outside investment, this is a very exciting time to be investing in the country.  India’s GDP has doubled in eight years from USD1 trillion in 2007 to USD2 trillion in 2015 and the IMF forecasts GDP growth of 7.3 per cent. There is clearly still a strong case for the continued strength of Indian domestic consumption.
“ZyFin’s strong heritage in providing macro analytics give it the vital and necessary underpinnings for developing innovative investment solutions. We are excited to taking the pioneering step of offering India’s first physically backed fixed income ETF and providing an opportunity for global investors to access India in a transparent and cost-effective manner.”

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