VanEck has launched a new ETF offering targeted exposure to the leading companies supporting and involved in India’s digitization.
The VanEck Digital India ETF (DGIN), which has a net expense ratio of 75 basis points, began trading on the NYSE on February 17.
“India is in the midst of a massive shift, driven in large part by the rapid digitization of the country’s economy,” Angus Shillington, deputy portfolio manager for VanEck’s active emerging markets equity strategy, said in a statement. “India’s population includes the largest ‘Gen Z’ of any country and a rising middle class. Due to these demographics, along with low data costs, increasing smartphone penetration and government policies designed to transform India into a digitally empowered society, the digitization of India is a key theme for investors looking for emerging growth opportunities.”
Out of India’s population of 1.4 billion people, 622 million are active internet users, with that number potentially rising to 900 million by 2025, bringing new consumption behavior and alternatives to traditional spending, banking, and shopping, according to VanEck..
Another major driver of this digital economy is the growing number of “unicorns” going public in India in recent years, enabled by the rise of a robust internet ecosystem, increased availability of private capital and a favorable regulatory environment. India has had 83 unicorns come to market with a total valuation of $278 billion, as of mid-January, according to VanEck.
“Zomato, one of the biggest names to recently come out of India’s IPO pipeline, is an excellent example of how digitization is creating new opportunities and revolutionizing consumer habits—in this case within food delivery,” William Sokol, director of product management at VanEck, said in a statement. “Digitization is taking place across all sectors of the Indian economy, within core digital sectors like IT services, telecom and software/hardware, as well as emerging themes and sectors like e-commerce, online brokerages and internet applications. DGIN offers targeted exposure to these trends, and we’re pleased to be bringing this Fund to market.”
DGIN tracks the MVIS Digital India Index (MVDINDTR), a rules-based index offering pure-play exposure to companies involved in supporting the digitization of the Indian economy.
Companies eligible for inclusion in the index must be domiciled, headquartered, or incorporated in India and have a market cap exceeding $150 million daily trading value, and be “pure play,” meaning that at least 50% of their revenues must be derived from one or more of the following categories: software, hardware, information technology services and consulting, communications equipment and infrastructure, telecommunications infrastructure, telecommunication services, internet applications, e-commerce (including online financial services), and electronic payment processing.
Indian companies that are ranked within the top 10 telecommunication services companies by annual revenue are also eligible for inclusion in the index.
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