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February 1, 2022

Satrix launches MSCI India ETF

South Africans can now access investment opportunities in emerging market India via the Satrix MSCI India ETF (exchange traded fund). Satrix, South Africa's leader in index investing, has opened its IPO for the fund, which will list on 24 February 2022. 

Satrix says the fund tracks the MSCI India NET TR Index, comprising of large- and mid-cap stocks covering around 85% of the Indian stock market. The index has delivered annualised performance of 11.6% since December 2000 and 26.2% in the past year, in net USD.

Siyabulela Nomoyi, quantitative portfolio manager at Satrix, says India is one of the world's largest and fastest-growing economies. ""Increasingly, investors are looking for alternative sources of portfolio returns, and India offers just such an opportunity. This is because it has a fast-growing and increasingly affluent middle class (around 50 million people today and headed for well over 400 million), a very young and educated population and relatively low wages compared to those in much of the rest of the emerging world. 

""Together with these long-term structural benefits and large-scale infrastructure growth, the Indian economy is growing, with its government committed to reform.""

He says that India has been somewhat 'unloved' by global investors in recent times. ""This means valuations have come down for a historically expensive equity market, which provides an attractive entry point relative to history."" 

India regularly ranks among the top 10 improvers in the “World Bank's Ease of Doing Business Rankings”, and Mumbai ranks highly on indices of liveable cities. India is also exceptionally technologically advanced with an open-minded, early adopting youth. In addition, low-cost data and widespread smartphone usage has fuelled e-commerce and digital banking. 

Nomoyi says this accelerating technology uptake is not yet fully reflected in the stock market, presenting investors with opportunities for growth. ""Global multinationals are also starting to question their overdependence on China, leading to a search for a viable alternative. Inexpensive and English-speaking, India is well placed to fill this gap with its established chemical, pharmaceutical and electrical manufacturing base.""

The global ETF will list on the JSE, and investors will access it in South African Rand. In addition, Satrix will replicate the index by investing in the iShares MSCI India UCITS ETF. 

Satrix has been at the forefront of bringing increased access to the markets, allowing investors to tailor their portfolios to meet their specific investment objectives. Being exposed to the stock market and to the ups and downs of the currency (rand) movement, this ETF is suitable only for long-term investment or to express an investment view on India within a broader portfolio.

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