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].
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.