Global X India Select Top 10 ETF (3184)
India's long-term growth potential is driven by factors such as a young and expanding population, a rising middle class, and increasing urbanization. These factors create a sizable domestic market and present numerous opportunities for businesses across various sectors, including consumer goods, retail, healthcare, and financial services.
India's multi-year capex cycle, characterized by increased investments in housing, corporate capex, and government capex, is expected to drive robust GDP growth of 6-7% over the next 5-7 years. (Souce: Jefferies, Jan 1, 2024) The virtuous housing cycle, low corporate debt-to-equity ratios, and a well-capitalized banking system contribute to the positive outlook for corporate capex. While a potential slowdown in government capex is anticipated, the private sector's capex pickup is expected to offset the decline.
Foreign investor positioning in India is relatively light, and increased foreign portfolio investment is expected in the coming year. Factors such as a peaking US dollar, the upcoming elections, and India's growing significance in global markets could attract foreign inflows. Banking stocks, in particular, stand out as having favourable risk-reward characteristics and the potential for earnings surprises, making them an attractive sector for investment.
While India's growth story remains compelling, the current investment landscape requires careful consideration. Valuations for Indian equities are at top-decile levels, and the market is trading at a significant premium relative to its historical average. This, coupled with the potential for a "perfect" soft landing scenario in the US economy, may lead to increased market volatility and the need for cautious optimism. Investors should be mindful of the risks associated with high valuations and manage their expectations for near-term returns.
Given the stretched valuations, it is crucial to be selective in investment choices. Mega-cap companies, banks, insurance, and energy sectors are favored due to their potential resilience in the market. Mega-caps are expected to attract a larger share of foreign institutional inflows, particularly from non-India dedicated funds. This preference for larger companies over small and mid-caps reflects the cautious sentiment prevailing in the market.
Exchange-Traded Funds (ETFs) offer a convenient and diversified way to invest in India. ETFs pool together a basket of securities and trade on stock exchanges like individual stocks. By investing in an ETF, investors gain exposure to a broad range of Indian stocks, sectors, or indices, reducing the risk associated with individual stock selection. ETFs also provide liquidity and transparency, making them an attractive option for both retail and institutional investors.
Stock Code | 3184 (HKD) # |
Underlying Index | Mirae Asset India Select Top 10 Index * |
Ongoing Charges Over A Year^ | 0.68% |
Inception Date | 18 Mar 2024 |
# Investment involves risk. Before making any investment decision to invest in the Fund, investors should read the Fund’s Prospectus for details and the risk factors. Visit Global X ETFs Hong Kong website for more details relating to this Fund (including but not limited to the Fund’s iNAV, market price, performance, daily holdings and tracking difference / error).
* The Underlying Index is a net total return, equal weighted index. A net total return index reflects the reinvestment of dividends or coupon payments, after deduction of any withholding tax (including surcharges for special levies, if applicable).
^ The Fund adopts a single management fee structure, whereby a single flat fee will be paid out of the assets of the Fund to cover all of the costs, fees and expenses of the Fund. Click [?] to learn more.