European ETF white labeller HANetf is to launch INQQ India Internet & Ecommerce ESG-S UCITS ETF (ticker: INQQ), designed to offer investors targeted exposure to India’s rapid digitisation.
The firm writes that, now the world’s most populous country, India is often hailed as the “new China” and has been capturing global attention with its remarkable economic growth rates – the IMF expects the country’s economy to grow by 6 per cent this year and be the fastest growing major economy in both 2023 and 2024.
The firm writes that despite a challenging few years for emerging market investors, India’s economic growth has translated into stock market returns – over the past five years, India’s BSE SENSEX has returned 93 per cent compared to the S&P 500’s 58 per cent.
This has been partly driven by the expansion of India’s middle class, which has grown to include 400 million new people over the past 15 years, paving the way for a new generation of consumers with increased spending power.
Simultaneously, the country’s digital infrastructure has expanded significantly, with over 98 per cent of the country’s vast population able to access 4G. This, coupled with the increased spending power of consumers, has translated to seven million new smartphone users a month. India’s internet economy is now poised to outgrow the country’s broader GDP.
The firm writes that INQQ seeks to capture this consumer-led digital revolution. It tracks INQQ The India Internet & Ecommerce ESG Screened Index (INQQETF), which is ESG-screened and has 100 per cent exposure to Indian companies. Holdings are screened to ensure at least 50 per cent of their revenue comes from internet and/or ecommerce. Given that many Indian companies are difficult to find if listed locally, INQQ offers investors targeted exposure to India’s digitisation.
HANetf and EMQQ Global previously partnered to launch EMQQ Emerging Markets Internet & Ecommerce UCITS ETF (EMQQ) in 2018, which provides exposure to the growth of online consumption in the developing world. Both EMQQ and INQQ have US-listed sister ETFs, with approximately USD470 million AUM on aggregate. The UCITS version of EMQQ is currently at USD170 million AUM.
Kevin Carter, Founder and Chief Investment Officer of EMQQ Global, says: “We are thrilled to bring INQQ to UCITS investors with HANetf. While developed nations have experienced the luxury of the internet for decades, over a billion consumers in India are only just beginning to go online. This booming consumer momentum, coupled with the country’s strong dedication to scaling physical and digital infrastructure in the coming years, is creating a compelling growth opportunity. We believe that the India Internet investment story is one that cannot and should not be ignored. INQQ allows investors to tap into the foundation of this growth being powered by the smartphone-enabled digital consumer.”
Hector McNeil, Co-Founder and Co-CEO of HANetf says: “We are delighted to be launching INQQ India Internet & Ecommerce ESG-S UCITS ETF (ticker: INQQ) with EMQQ Global. India’s prominence in the global economy has become impossible to overlook. Optimism surrounding its economy is on the rise, with many eyeing India as a destination for “China plus one” diversification strategies, highlighting the nation’s growing significance in the global economy. But the real opportunity in India, we believe, is digital-enabled consumption. The INQQ ETF provides a way for investors to capture this exciting segment of the Indian market. Many broader indices include state owned enterprises which historically have been a drag on growth whereas ecommerce business tend to be entrepreneur led.”
