Singapore-based asset management and advisory firm Zyfin Holdings on Thursday launched Europe’s first physically-backed Indian equity exchange traded fund. Called the LAM Zyfin MSCI India UCITS ETF, the fund listed on the London Stock Exchange as well as the Deutsche Borse.
It will offer investors exposure to Indian equities by tracking the performance of the MSCI India 10/40 Index, denominated in the U.S. dollar.
The index is designed to measure the performance of the largecap and midcap segments of the Indian equity market. Comprised of 74 constituents, the index covers approximately 85 percent of the free float-adjusted market capitalisation in India, reflecting the market’s economic diversity, ZyFin said in its press release.
The MSCI India index is followed by 98 percent of all the global investors as a benchmark to invest in India. Unlike existing products, the newly launched ETF will allow all global investors to access India, including those who do not have the mandate to invest in derivatives or structured products, Sanjay Sachdev, chairman of Zyfin Holdings told BloombergQuint in an interview. This is because the ETF has been launched on a physically-backed basis and not as a derivative product. The new fund will try to compete on the basis of costs, he added.
Currently, the emerging market basket does not look attractive, with the exception of India, Sachdeva said, when asked about the rationale for an Indian equity ETF.