Unlocking the Potential of India’s Digital Economy
India is currently one of the fastest-growing major economies globally, with a strong GDP growth trajectory in recent years. This economic upswing is fueled by a young and technologically savvy population, increased urbanization, and a growing middle class with rising disposable incomes. These factors have ignited a rapidly expanding consumer market that is expected to continue growing for the foreseeable future.
The Digital Transformation of India
Amidst this digital revolution, India has become a fertile ground for innovative internet companies that are digitizing almost every sector of the economy. From e-commerce platforms like Nykaa to fintech companies like Policybazaar and the food delivery giant Zomato, these companies are playing a pivotal role in reshaping India’s digital landscape.
Driving Forces of Growth
One of the primary drivers behind India’s digital transformation is the increasing internet usage in the country. Approximately 7 million new smartphone users are added every month, indicating a significant growth potential. While the digital shift has accelerated in recent years, data suggests that India is still in the early stages of its digital evolution.
The rapidly growing internet penetration is creating vast opportunities for companies in e-commerce and fintech sectors.
Hanetf INQQ India Internet UCITS ETF: Unleashing the Power of India’s Digital Economy
The Hanetf INQQ India Internet UCITS ETF is an exchange-traded fund that offers investors a pure exposure to India’s internet and e-commerce sector. Launched on November 15 last year, the fund has a limited track record in terms of returns and risks.
By focusing on companies at the forefront of India’s digital transformation, this fund presents significant opportunities to capitalize on the robust growth in the country’s internet and e-commerce sectors. The fund tracks the INQQ The India Internet ESG Screened Index calculated by the German index provider Solactive.
- The index consists of 25 companies that generate a majority of their revenues from internet and e-commerce activities in India.
- Companies included in the index must have a market value of at least $300 million at inclusion and an average daily turnover of at least $1 million over three months.
Applying an ESG screening excludes companies that do not meet high standards of environmental, social responsibility, and corporate governance. This makes the fund particularly appealing to investors seeking sustainable investments while gaining exposure to India’s rapidly growing internet sector.
The index is capital-weighted but has a limited maximum weight, with no single stock exceeding 8 percent at index rebalancing, which occurs twice a year.
Key Holdings
The top ten holdings make up over 65 percent of the fund’s value, with Zomato being the largest holding at 8.8 percent.
Zomato is a leading digital platform for food delivery and restaurant reviews in India. The company, founded in 2008, has revolutionized how Indians order food and explore restaurants online, becoming an integral part of India’s digital ecosystem.
One 97 Communications (Paytm) is the second-largest holding at 8 percent. Paytm operates one of India’s largest digital payment platforms, which has expanded to include a wide range of financial services, such as digital wallets, payments, insurance, and investment services.
Bajaj Finance, the fund’s third-largest holding, is one of India’s major players in consumer finance, offering a range of financial products, including loans, credit cards, and insurance.
Nykaa, a leading e-commerce platform for beauty and fashion, is another notable company in the fund. Founded in 2012 by former investment banker Falguni Nayar, Nykaa went public in 2021, challenging traditional gender and age norms and becoming a key player in India’s beauty industry.
With a clear ESG focus and a broad portfolio of leading internet and e-commerce companies, the Hanetf INQQ India Internet UCITS ETF presents an enticing option for those looking to invest in India’s digital future.
The fund has an annual management fee of 0.85 percent, in addition to brokerage fees when traded as a stock.
Analyzing the Potential of Hanetf INQQ India Internet UCITS ETF
The Hanetf INQQ India Internet UCITS ETF offers investors a unique opportunity to tap into the growth potential of India’s digital economy through a diversified portfolio of companies driving the country’s digital transformation. With a focus on sustainability and high-growth sectors like internet and e-commerce, this fund is well-positioned to capture the opportunities presented by India’s evolving digital landscape.