Emerging Global Plans Sector-Specific India ETFs

by on March 18, 2011 | ETFs Mentioned:

Emerging Global Advisors, the only ETF issuer focusing exclusively on emerging markets, has filed details on a suite of products that would offer more targeted exposure to India’s stock market. In a recent SEC filing, the firm detailed plans for nine ETFs focusing on specific sectors of the Indian economy: 

  • EG Shares India Consumer ETF
  • EG Shares India Financials ETF
  • EG Shares India Health Care ETF
  • EG Shares India Telecom ETF
  • EG Shares India Industrials ETF
  • EG Shares India Technology ETF
  • EG Shares India Utilities ETF
  • EG Shares India Basic Materials ETF
  • EG Shares India Energy ETF

The filing didn’t specify the indexes that the proposed funds would seek to replicate, but did note that the management fee would be 0.89%.

In addition, Emerging Global outlined an India High Income Low Beta ETF that would focus on dividend-paying Indian stocks that exhibit a relatively low beta relative to the broad Indian stock markets. Also included in the filing were details on a similar fund that would focus more broadly on emerging markets stocks; the Emerging Markets High Income Low Beta ETF would include dividend-paying companies in the emerging world that exhibit low beta relative to a broad-based emerging markets index.

India ETF Options Multiplying

Emerging Global already offers two funds focusing exclusively on the Indian market, including the India Infrastructure ETF (INXX) and India Small Cap ETN (SCIN). INXX is the only sector-specific India ETF available to U.S. investors; all other products offer broad-based exposure to all corners of the market. Emerging Global’s product line already includes funds targeting specific sectors of broader emerging markets, including financials (EFN), energy (EEO), metals and mining (EMT), and consumer goods and services (ECON) [see all India ETFs].

Though emerging markets ETFs as a whole have seen strong outflows this year as investors have fled risky assets–EEM and VWO bled a combined $3.8 billion during February–EGA has experienced inflows of about $75 million through the first two months of the year. That reflects perhaps an interest among investors in implementing sector rotation strategies in emerging markets–for example tilting exposure towards sectors such as energy and mining that could perform well in inflationary environments.

The introduction of the products proposed in the recent SEC filing could similarly allow investors to fine tune exposure to India in a manner that isn’t possible with the current lineup of international ETFs.

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Disclosure: No positions at time of writing.