With over $30 billion under management, Betashares has long been a cornerstone of Australia’s financial landscape. But in its effort to democratise investing down under, the company is reaching into one of the world’s most tantalising economic playgrounds: India. Their IIND ETF aims to capitalise on high-quality companies in a country whose economy is growing faster than any major nation’s. Here, we examine what the fund offers, the strategy it employs, and the potential risks involved.
A Journey Beyond Borders
The IIND ETF aims to track the performance of an index made up of a diversified portfolio of the highest quality Indian companies. The fund follows an index that handpicks 30 of India’s best-performing companies based on three key factors: high profitability, low leverage, and high earnings stability. The aim is straightforward—allow investors to tap into India’s rapid economic growth through companies that exhibit long-term viability and resilience.
The Allure of India’s Economy
The Indian economy is one of the fastest-growing globally, with robust structural fundamentals. Its young population, an expanding middle class, and a reform-focused government provide a fertile ground for businesses to flourish. The IIND ETF offers a conduit to such an environment by holding a portfolio of top Indian companies scored by quality, thus seeking to exploit inefficiencies better than traditional market-cap weighted alternatives.
Strategic Choices and Their Implications
It’s worth noting the sector allocation of the IIND ETF. As of the end of August 2023, the fund has considerable weight in Information Technology (22.1%), Financials (16.8%), and Consumer Staples (16.7%). Companies like Tata Consultancy Services and Infosys lead the list of holdings, which could indicate a tech-heavy focus. While these sectors have shown resilience and growth, the focus does mean that investors are exposed to any volatility or downturns in these specific sectors.
Weighing the Risks
Like any investment, IIND comes with its own set of risks. These include market risk, index methodology risk, international investment risk, concentration risk, and currency risk. Despite the promising high growth, the Indian market is still considered an emerging market, with all the associated risks, including political instability and regulatory unpredictability. Potential investors must consider these factors, weighing them against their own risk tolerance and investment goals.
Financial Metrics
As of 25 September 2023, the net assets of the IIND ETF stand at approximately $93 million AUD. With a management fee of 0.80%, the fund also requires no minimum investment. According to the latest data, the fund’s one-month and six-month returns stand at 3.15% and 14.39%, respectively. While promising, it’s essential to remember that past performance is not a reliable indicator of future returns.
The Final Word
In summary, the IIND ETF by Betashares presents an intriguing proposition for those looking to diversify their portfolio with international assets. It offers an accessible and focused entry point to one of the world’s most dynamic economies. However, the fund’s potential for outsized gains comes with a corresponding risk profile. Therefore, it’s advisable for this investment to be just one part of a diversified portfolio.
In the ever-expanding universe of ETFs, Betashares’ IIND offers more than just a ticket to the Indian economic theatre; it offers a carefully curated experience designed for the investor seeking both risk and reward. While no investment is a guaranteed win, IIND’s focus on quality Indian companies offers a unique value proposition worth considering for those ready to explore beyond their borders.
The information presented in this article is for informational purposes only and should not be considered as financial advice. As of the time of writing, IIND was trading at $10.85 with a trading volume of 2,941. The day’s change indicated an increase of $0.03, or 0.37%. The fund’s bid/offer range was $10.82 – $10.85. The total fund size stands at $88.09 million, and it falls under the category of ‘Equity World Other’ with its benchmark being the Solactive India Quality Select NR. It’s crucial to conduct your own research or consult a financial advisor before making any investment decisions. Past performance is not indicative of future results.
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