This week’s growth-oriented exchange-traded fund (ETF) presents investors with an opportunity to invest in the emerging-market country of India through the iShares India 50 ETF (INDY).
India is a country that, in recent years, has become a place of interest for many investors and companies. The country has a pro-capitalist political climate, a huge amount of human capital and citizens who are hungry for economic growth and enhanced living standards.
The iShares India 50 ETF is designed to tap into this great potential by tracking the CNX Nifty 50 Index, comprising the 50 largest and most liquid stocks currently trading on the National Stock Exchange of India. With India’s drive for an improved economy and overall higher standard of living, the financial and technology sectors are the top two areas represented in INDY, with 30.38% and 16.48% of the fund’s holdings, respectively.
While India’s growth on the global stage shows no signs of slowing, financial uncertainty worldwide has shaken the INDY fund over the last few months, with a decline of about 10% in the fund’s price since early December. However, thanks to a massive 50% rise in the share price throughout 2014, INDY is still more than 10% above its price two years ago. INDY currently has around $758 million in assets managed, a 0.93% expense ratio and a small dividend of 0.61%.
INDY’s top holdings are primarily a combination of its four main sectors: financials, technology, consumer cyclicals and energy. The fund’s largest holding with 7.81% of its assets is Infosys Limited, India’s second-biggest IT services company. The next-highest percentage position of INDY is HDFC Bank, which is close behind the leader at 7.57%. The rest of INDY’s top five holdings are Housing Development Finance Company, 6.99%; ITC Limited, 6.60%; and Reliance Industries Limited, 5.98%.
If you think it might be advantageous to pay attention to this up-and-coming country, the iShares India 50 ETF (INDY) might be a good place to start.
If you want my advice about buying and selling specific ETFs, including appropriate exit points, please consider subscribing to my Successful ETF Investing newsletter.