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EMQQ Global, the team behind the ETF EMQQ Emerging Markets Internet and E-commerce (EMQQ US)a $1.4 billion emerging markets fund focused on internet and e-commerce stocks, has launched a new ETF targeting companies leading India’s digitalization.
the Indian Internet & E-Commerce ETF (INQQ US) was listed on NYSE Arca with an expenditure rate of 0.86%.
India is the third largest emerging market and fastest growing major economy in the world – KPMG expects the country’s GDP to grow by 7.7% in 2023.
With India home to more than a quarter (27%) of the world’s Gen Z population, a middle class expected to double by 2030 and 25 million new smartphone users added every quarter, analysts predict the nation will Southeast Asia is about to enter a golden age of digitization.
Kevin T. Carter, Founder and Chief Investment Officer, EMQQ Global, said, “India is an extraordinary investment opportunity and central to the story of e-commerce growth and digitalization in emerging markets. and borders beyond China. You can think of this opportunity as “the next billion” as the people of India get affordable internet access for the first time through smartphones, changing the way people buy food and clothes, access entertainment, bank, learn, and more. ”
“In addition to the entrepreneurs and the technology that is being created and brought to India, there is major support from the Indian government. Indian President Modi launched the “Digital India” campaign in 2015 with the aim of having a trillion-dollar online economy by 2025 and improving the infrastructure needed to digitally empower the country.
The ETF seeks to capitalize on the rise of India’s digital consumer by following the Indian Internet and E-Commerce Index. The index selects its constituents from a universe of Indian equities, including American Depository Receipts, with market capitalizations above $300 million and average daily trading volumes of at least $1 million.
The methodology selects companies that derive at least half of their profits, revenues or assets from Internet and e-commerce activities. Eligible activities encompass themes such as Internet Services, Internet Retail, Internet Broadcasting, Internet Media, Online Advertising, Online Travel, Online Gaming, Search Engines and Networking social.
Securities that meet these criteria are selected to form the index and weighted by float-adjusted market capitalization subject to an individual safety cap of 8% and an aggregate cap of 50% for stocks representing 5% or more. The index is replenished and rebalanced on a semi-annual basis.
As of April 6, the index was heavily exposed to the industries of e-commerce (25.7%), fintech (25.0%), e-ticketing (16.0%), ad tech (11.3 %) and communication software (7.7%).
Approximately 85% of the index weighting was allocated to stocks classified as mid caps. Notable positions included Reliance Industries (8.0%), Info Edge India (8.0%), Indian Railway Catering & Tourism (8.0%), MakeMyTrip (8.0%), Tanla Platforms (6.5% ), One 97 Communications (5.6%) and FSN E-commerce Enterprises (5.3%).
The ETF represents the third launch of EMQQ Global, with the company also offering the Next Frontier Internet and E-Commerce ETF (FMQQ US) which invests in internet and e-commerce stocks from emerging markets while excluding those listed in China.
EMQQ and FMQQ also come with expense ratios of 0.86%.