Direxion Plans Slew Of India ETFs

by on May 13, 2011 | ETFs Mentioned:

Direxion, best known as a provider of inverse and leveraged ETFs, has taken the first step towards launching a suite of nine funds dedicated to one of the world’s most promising emerging markets. In a recent SEC filing the company detailed nine different “IndiaShares” ETFs, including sector-specific funds and what would be the first India-specific fixed income ETF. The proposed funds include:

  • IndiaShares Fixed Income Shares
  • IndiaShares Mid & Small Cap Shares
  • IndiaShares Consumer Shares
  • IndiaShares Energy & Utility Shares
  • IndiaShares Financial Shares
  • IndiaShares Industrial Shares
  • IndiaShares Infrastructure Shares
  • IndiaShares Materials Shares
  • IndiaShares Technology & Telecommunication Shares

The fixed income ETF would seek to replicate the Indus India Fixed-Income Index, a “hybrid index” that includes 25 securities which are (a) sovereign debt issued by the government of India and (b) highly-rated corporate debt of Indian companies, including debt issued by public sector undertakings in which the government of India has a majority interest. According to the filing, that fund would invest in a wholly-owned subsidiary in the Republic of Mauritius, which would in turn invest in the fixed income securities that make up the index [Three Fixed Income ETFs For A Well Balanced Portfolio].

India ETFs

There are currently nine pure play India ETFs, including a pair of 2x products (INDL and INDZ) from Direxion. The only sector-specific India ETF currently available is the EGShares India Infrastructure ETF (INXX) that debuted in late 2010. That fund has about $80 million in assets, and charges an expense ratio of 0.85% [India Infrastructure ETF In A Pickle, What's Next?].

EGShares also offers a small cap India ETF (SCIN) that competes with a similar product from Van Eck (SCIF). The rest of the proposed ETFs from Direxion would be first of their kind, though a March filing from EGShares included details on a number of sector-specific India ETFs, including consumer, energy, utilities, financials, industrials, materials, telecom, and technology [see Emerging Global Plans Sector-Specific India ETFs].

Direxion currently offers one non-inverse and non-leveraged ETFs, the Airline Shares (FLYX). That fund debuted in December 2010. Each of the proposed India ETFs would charge a net expense ratio of 0.95%.

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Disclosure: No positions at time of writing.