Benefit From India’s “Unstoppable” Middle Class Growth With The New India-focused ETF
Jim Cramer, speeking on CNBC’s Mad Money (video below), calls the growth of the middle class in India “unstoppable” and said there are several positive signs coming out of India right now. “The present size of India’s middle class varies by estimate, which ranges between 50 million and 300 million people — roughly equivalent to the entire US population. One of the more conservative estimates, though, comes from McKinsey, which in 2007 projected an increase from 50 million to 583 million by 2025 — a more than tenfold increase in the number of middle-class people in India. By 2025, India’s expected to become the fifth-largest consumer market, and discretionary spending should grow from 52% of the national income to 70%.” Drew Sandholm quotes Cramer as saying.
“The growth of the middle class means more travel, more trade, more need for electricity, more need for clean water,” Cramer said. “This is going to benefit the Indian infrastructure companies.”
In the next few weeks, a new India-focused ETF will trade under the ticker (INXX) and is expected to invest in 30 companies involved in Indian infrastructure. It includes the largest gas transmission company in India and the largest private power utility. But Cramer added one caveat: “The INXX is more of a trading tool, not something you want to park in over the long-term. I would double the homework before investing in it.”
Emerging Global Advisors, a New York-based research and asset management firm specialising in emerging markets, plans to launch the EG Shares Indxx India Infrastructure Index Fund (INXX) within the next couple of weeks. This fund will be the first theme-specific fund among the India-focused ETFs, while the others track major Indian indexes based on large-cap stocks. The new ETF will have a portfolio of 30 companies involved in India’s infrastructure sector, from copper and cement companies to those providing transportation and movement of capital goods. It will be a passively-managed fund, tracking an index built by the New York- and Gurgaon-based firm, Indxx LLC.
See the full video below:
iPath MSCI India ETN (INP)
The investment seeks to track the performance, before fees and expenses, of the MSCI India Total Return Index. The index is a free float-adjusted market capitalization index that is designed to measure the market performance of Indian securities. It is currently comprised of the top 68 companies by market capitalization listed on the Nation Stock Exchange of India. The fund is nondiversified.
WisdomTree India Earnings Fund (EPI)
The investment seeks to track the price and yield performance, before fees and expenses, of the Wisdom Tree India Earnings index. The fund employs a passive management (or indexing) investment approach designed to track the performance of the WisdomTree India Earnings Index. It attempts to invest all, or substantially all, of assets in the stocks that make up the Index. The fund makes its investments through a wholly-owned subsidiary, the WisdomTree India Investment Portfolio, Inc.
PowerShares India Portfolio (PIN)
The investment seeks to replicate as closely as possible, before fees and expenses, the price and yield performance of the Indus India index. The fund normally invests at least 80% of total assets in securities of Indian companies. It will normally invest at least 90% of total assets in securities that comprise the index and ADRs based on the securities in the index.
iShares S&P India Index Fund (INDY)
The investment seeks results that correspond generally to the price and yield performance, before fees and expenses, of the S&P CNX Nifty 50 Index. The fund invests at least 80% of the total assets in securities that comprise the index and depositary receipts representing securities of the index. The index measures the equity performance of the top 50 companies by market capitalization that trade on the Indian market.
Direxion Daily India Bull 2x Shares (INDL):
The investment seeks daily investment results, before fees and expenses, of 200% of the price performance of the Indus India index. The fund normally invests at least 80% of net assets in the equity securities that comprise the Indus India index, including depositary receipts. It invests in financial instruments that, in combination, provide leveraged and unleveraged exposure to the Indus India index.
Direxion Daily India Bear 2x Shares (INDZ):
The investment seeks daily investment results, before fees and expenses, of 200% of the inverse (or opposite) of the price performance of the Indus India index. The fund normally creates short positions by investing at least 80% of net assets in financial instruments that, in combination, provide leveraged and unleveraged exposure to the India index, and the remainder in money market instruments.