BetaShares has launched the BetaShares India Quality ETF (IND) on the ASX, giving investors convenient and cost-effective access to companies trading on the National Stock Exchange of India.
India has been one of the fastest growing economies in the world, with GDP growth of 7.5 per cent pa over the last decade to 2018, and the IMF forecasting continued growth at approximately this rapid rate for the next five years.
IIND aims to track an Index which provides exposure to a diversified portfolio of the highest-quality companies trading on the National Stock Exchange of India.
BetaShares CEO Alex Vynokur says: “India is arguably one of the most compelling global investment opportunities available, with the country’s future growth potential underpinned by strong structural fundamentals, such as increasing urbanisation, adoption and development of technology and a young, growing population. In more recent times, trade tensions between the US and China have given India an opportunity to ramp up exports to both countries. Indeed, India is the only major Asian economy that’s grown its global export share since the start of the trade wars in 2018.
“For Australian investors, there have historically been very few dedicated ways to invest in the growth opportunity of Indian stocks. With IIND, we’re excited to offer access to the Indian market opportunity as simply as buying any share on the ASX,” he adds.
IIND’s index has significantly outperformed both Australian and global equities since its inception in June 2008. As at the end of July 2019, the Index had delivered a return since inception of 11.1 per cent p.a., compared with 9.2 per cent p.a. for the MSCI World Index, and 7.0 per cent p.a. for the S&P/ASX 200 Index.
In addition, exposure to India offers potential for portfolio diversification benefits to Australian investors, as Indian equity returns historically have had low correlation to both domestic and global equities.
Cost-effective, reduced concentration risk IIND is currently the lowest-cost India ETF on the ASX and has been designed to limit concentration risk.
India’s sharemarket is one of the most concentrated in the world, and to reduce this stock concentration, IIND’s methodology mitigates the potential for a small number of companies to dominate returns compared to a market capitalisation-weighted approach. Additionally, the methodology selects the highest-quality companies from both large and mid-cap Indian companies, which is considered to provide an investment exposure more indicative of the broad Indian economy.
“We believe IIND continues the BetaShares tradition of offering Australian investors innovative and intelligent investment solutions to help them meet their financial objectives,” says Vynokur.