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QNB Suisse S.A. (‘QNB Suisse’), in partnership with ZyFin Holdings Pte Ltd. (‘ZyFin’ - the specialist Emerging Markets advisor), today announce the listing of Europe’s first physically replicated Indian Consumption Equity ETF – QNB ZyFin India Consumption UCITS ETF.
QNB ZyFin India Consumption UCITS ETF (“The Fund”) offers investors exposure to India’s real consumption ‘story’ by tracking the ZyFin India Consumption Index (“the Index”), denominated in US dollars. The Fund will use physical replication in order to track the returns of the Index as closely as possible, after deduction of fees and expenses.
The ZyFin India Consumption Index is a thematic index which is aligned to the on-going expansion being seen in domestic Indian consumption. The Index has been approved for UCITS Funds by The Central Bank of Ireland (where the fund is domiciled), and is ESMA (5/10/40) and SEC (25/50) regulation-compliant, ensuring an adequate level of diversification at all times. ZyFin’s rule-based proprietary architecture selects liquid equities via an automated annual rebalancing exercise. Consumption-related equities constitute approximately 35% of the ZyFin Investible Universe, in terms of market capitalisation. The Index comprises 30 stocks with the top five sectoral weights being Healthcare (27.51%), Automobiles (25.51%), Housing Utilities (16.97%), HH and Personal Prods (12.62%) and Food & Beverages (12.26%) as at 30th November, 2016.
The IMF has forecast that India will be the fastest growing major economy in the coming 2 years, following what has been a very high rate of economic expansion since the mid-1980s (average annual real GDP growth rate: 6.4%). India is the only major emerging market economy which is substantially driven by domestic consumption and which is, therefore, relatively less exposed to global shocks. 60% of Indian GDP is consumption-related, and even though consumer stocks presently account for only 25% of the overall equity market (Market Cap), this proportion is set to grow as markets evolve and the consumption-related segment strengthens, providing a unique opportunity for investors. There are a number of key factors supporting the projected expansion of Indian consumption, including the ‘demographic dividend’, rising personal income levels, and wider access to credit. Further to this, the Indian Government’s recent demonetization move will have only a transitional impact on the country’s GDP, while, longer-term, consumption levels are likely to be reinforced. With this fund, global investors will now be able to participate in India’s consumption growth, driven by what can only be increased demand from its 1.3 billion citizens.
Ajay Kumar, Assistant General Manager at QNB Group, commented:
“The QNB ZyFin India Consumption UCITS ETF is an exciting addition to QNB’s growing range of investment management services. It is the latest example of QNB’s continuing focus on attractive investment opportunities, worldwide, with emerging markets figuring strongly. This broadly-based and entrepreneurial approach is closely aligned with the bank’s established strategy of developing its already very significant global footprint. This new ETF provides a unique opportunity for global investors to be a part of the remarkable and on-going economic growth which India has enjoyed, in recent years. We expect these strong levels of growth to continue as the country’s vast population drives heightened consumer demand”.
Sanjay Sachdev, Executive Chairman at ZyFin, added:
“The launch of QNB ZyFin India Consumption UCITS ETF is the most important step in ZyFin’s continued efforts to offer global investors attractive and cost-effective products while providing easier access to fast-growing emerging markets. India’s consumption story is at an inflection point, with a rising middle class and exponential growth in disposable incomes. As evolving demographics continue to favour a substantial increase in consumption volumes, the case for investment in India becomes even more compelling.
