ZyFin Holdings, together with its London-based ETF distribution partner First Trust Global Portfolios, has listed Europe’s first physically replicated Indian equity ETF – The LAM ZyFin MSCI India UCITS ETF – on the London Stock Exchange and Deutsche Börse.
The LAM ZyFin MSCI India UCITS ETF offers investors exposure to Indian equities by tracking the performance of the MSCI India 10/40 Index Net TR (the Index), denominated in US Dollars.
The fund will use a physical replication strategy in order to track as closely as possible the returns of the Index after the deduction of fees and expenses.
The MSCI India 10/40 Index is designed to measure the performance of the large and mid-cap segments of the Indian equity market. Comprised of 74 constituents, the index covers approximately 85 per cent of the free float-adjusted market capitalisation in India, reflecting the market’s economic diversity, and has outperformed the MSCI India Index and MSCI Emerging Markets Index consistently over a 16-year period. The index is rebalanced quarterly to account for changes in the market capitalisation of an index component (i.e. the number of shares issued and the free float) or its sector classification.
The MSCI 10/40 Equity Indices are designed and maintained to take into consideration the 10 per cent and 40 per cent concentration constraints on funds subject to the UCITS Directives. The majority of equity benchmarks offered in the European marketplace today are not constructed to automatically address these regulatory investment constraints, which often leads to misstating the true investable universe.
India is projected to be the fastest growing major economy for the next two years, according to the IMF, and has enjoyed Real GDP growth year-on-year at an average of 6.4 per cent for the last 33 years. There is the potential for accelerated growth in India’s domestically orientated economy as income levels per capita rise while central bank reforms, political stability, lower rates and macro improvements will reflect on corporate earnings.
Sanjay Sachdev, executive chairman at ZyFin, says: “We are excited to be launching Europe’s first physically backed Indian equity ETF, a product which fits perfectly with our ethos of offering investors cost-effective and transparent access to investment opportunities in emerging markets. Many advisers and wealth managers shy away from using synthetic products, so the LAM ZyFin MSCI India UCITS ETF is an ideal solution for offering investors access to attractive growth opportunities in India. With economic growth for the current and forthcoming year projected at 7.4 per cent (IMF), a huge workforce and growing middle class the investment case for India is compelling.”
Derek Fulton, CEO of First Trust Global Portfolios, adds: “As the London-based ETF distributor we are very pleased to offer European investors access to the vibrant Indian equity market with Zyfin’s innovative investment solution. We believe the MSCI India 10/40 Index offers a truly diversified representation of India’s economic growth story, which investors can now access in a cost effective and transparent manner.”
Phil Beattie, executive director, index product at MSCI, says: “We are pleased that ZyFin has selected an MSCI index for Europe’s first Indian equity ETF. MSCI’s wide range of indexes has made us a leading index provider for the global ETF market as they look to develop new products as the equity markets evolve and new opportunities emerge.”