The Investment Fund
The LAM Sun Global ZyFin India Sovereign Enterprise Bond UCITS ETF (the Fund) offers British and international investors exposure to a basket of Indian public sector corporate bonds. The fixed income ETF will be Europe’s first physically replicating Indian ETF backed by real underlying securities as opposed to notional securities or derivatives.
The Fund tracks the performance of the ZyFin India Sovereign Owned Enterprise Bond Index based on cutting edge research and contains bonds from companies of national interest that are majority-owned by the Government of India, so-called Sovereign Owned Enterprises (SOEs). The corporate bonds are denominated in Indian rupees, have an AAA rating and a residual maturity between 4 to 20 years with current average maturity of 8.97 years. Although partly state owned, the average yield of the portfolio is close to 8.23 per cent (in INR) which is higher than the yield of Indian sovereign bonds. All the bonds in the Index are equally weighted, and no more than one bond from a company is included.
While ‘Masala Bonds’ provide exposure to a single corporate issuer, the Fund will offer exposure to a basket of securities with the highest credit rating through a SOEs only portfolio. In addition, investors will benefit from a larger market size and enhanced liquidity through listing on the London Stock Exchange.
Sanjay Sachdev, Executive Chairman at ZyFin, commented:
“We are excited to be launching the world’s first Indian fixed income ETF today as part of our product line of innovative ETFs intended to give investors cost-effective and transparent access to investment opportunities in emerging markets. The launch of the Fund will give international investors the ability to invest in these difficult to access but well researched AAA rated Indian Sovereign Owned Enterprises. Building on our many years of macro analytical research expertise in this field, we see our task as offering investors around the world attractive investment opportunities.”
Mihir Kapadia CEO of Sun Global Investments Limited said:
“We’re pleased to be able to provide global investors access to high quality bonds via this new, innovative ETF at attractive yields at a time when developed bond market yields are at very low levels and in fact negative in Germany or Switzerland. The listing reflects our view that Indian nominal yields are among the highest in the world and the macroeconomic fundamentals for India remain very attractive with India expected to overtake China next year as the world’s fastest economy”.
