The Dutch pension asset manager's Asia Pacific head of real estate says his team has just had one of its busiest years ever and that 2021 is looking similarly promising.
The fundÆs aim, according to BGIÆs director for North Asia, Joseph Ho, is to provide global investors with a ôconvenient and cost-effectiveö way to access the Indian equities market.
ôThis is a pure commercial product designed for all investors, and not just institutions,ö he says, adding that the minimum investment will be about $428 at launch.
ôThe demand for India is enormous, notwithstanding the recent pull back in the market, and could even be greater than China,ö Ho adds. ôFrom the experience of BGI with Hong KongÆs A50 China fund, we think this could really open the countryÆs market up internationally.ö
Ho points out that the iShares FTSE/Xinhua A50 China Tracker, which was launched in November 2004, has gone from an initial fund size of $25 million to nearer $800 million today. Liquidity in the fund remains good, he says.
ôIndiaÆs not constrained by all the QFII regulations the way China is, so itÆs easy to see the potential here,ö he adds.
The new fund, which will list on the 15th June, will track the MSCI India Index, which is designed to provide a broad-based coverage of at least 85% of the free float-adjusted market capitalisation of each industry group in the Indian market.
There are already six ETFs listed in India, five on the National Stock Exchange and one on the Bombay exchange. Asset sizes have remained comparatively low, with the largest fund, the S&P CNX Nifty, featuring assets of just under $80 million.
However more sector-specific ETFs are in the planning stage, with 10 of them being launched by domestic player Benchmark Asset Management.
Mega players Nippon Life and Dai-ichi Life are looking for opportunities in higher-yield single-A US corporate bonds, which offer more appealing yields than stagnant domestic offerings.
The “lower for longer” monetary policy and stimulus packages, coupled with the rolling out of vaccine programmes favorably support real estate investing in the region, with offices and data centres presenting forward-looking opportunities.
As US fixed income default rates rose and yields fell during the pandemic, are Asian bonds, which have had more stable yields through 2020, looking more attractive?
Insto roundup: Norway's Oil Fund praises China governance efforts; NPS commits $100m to taxi-hailing app
Norway's Oil Fund welcome Chinese proposals improving transparency and shareholder protection; HK's MPF assets surge 35% year on year; Korea's NPS commits $100m to TPG consortium to invest in taxi-hailing app; Poba commits W270bn to European property; Malaysia's EPF sees investment income rise 59% year-on-year in first quarter, and more.