First Indian fixed income ETF and Europe’s first physically backed Indian ETF to list on the London Stock Exchange on 19th November
· Announcement comes as PM Narendra Modi arrives in UK for a three day visit to strengthen UK-India ties
LONDON, 12th November 2015: Sun Global Investments Limited and ZyFin Holdings Pte. Limited (ZyFin) have today announced plans to list the world’s first Indian fixed income ETF, the LAM* Sun Global ZyFin India Sovereign Enterprise Bond UCITS ETF, on 19th November on the London Stock Exchange. The announcement comes ahead of Indian Prime Minister Narendra Modi’s arrival in London, UK later today for a three-day visit to further strengthen financial ties between the United Kingdom and India.
The LAM Sun Global ZyFin India Sovereign Enterprise Bond UCITS ETF will, for the first time, offer 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.
Indian Sovereign Owned Enterprises (SOEs) are corporations of national interest which are 51% owned or more by the Government of India. SOEs play a major role in India’s infrastructure development and include the Indian Railways, Power Finance Corporation and Rural Electrification Corporation of India. The launch of the Fund will for the first time allow foreign investors the opportunity to invest in these difficult-to-access but well researched AAA rated Indian companies. The UCITS compliant ETF provides exposure to corporate bonds which have an average duration of over 10 years and although partly state owned, yield higher than an Indian Sovereign Bond at around 7%.
The announcement coincides with Prime Minister Narendra Modi’s arrival in the UK for a three day visit, where it is expected that a deeper collaboration between the financial centres of London and Mumbai will be discussed with the British Prime Minister David Cameron. The diversification of the Indian bond market is one of many initiatives being undertaken by the Government of India to attract foreign direct investment into the country. The broadening of the investor base to include foreign portfolio investments, such as the Sun Global Zyfin SOE Bond ETF, has been recognised as an important step forward to help develop India’s corporate bond market.
Mihir Kapadia, CEO at Sun Global Investments, said: “As a London–based FCA regulated company, we are very pleased to partner with ZyFin and work with the London Stock Exchange to provide global investors with an efficient way to invest in bonds issued by high-quality Indian state-owned companies. This venture shows the versatility, creativity and flexibility of the financial sector in London and the investment opportunities available as a result of the rising economic growth in India.
“Innovation is at the heart of our business which is why we are able deliver unique opportunities such as the new Indian SOE bond fund ETF which offer such low-risk, high-return investments.”
“This listing of this fund reflects our view that Indian nominal yields are among the highest in the world. With India expected to overtake China next year as the world’s fastest growing economy, we are confident that new investments innovations such as ours will help reinforce its growth trajectory”, Mr. Kapadia added.
Sanjay Sachdev, Executive Chairman at ZyFin, commented: “This is the first time global investors will have access to AAA rated government owned Indian companies through an exchange traded fund and with the Indian government keen to stimulate outside investment, this is a very exciting time to be investing in the country. India’s GDP has doubled in eight years from $1 trillion in 2007 to $2 trillion in 2015 and the IMF forecasts GDP growth of 7.3%. There is clearly still a strong case for the continued strength of Indian domestic consumption.”
He continued: “ZyFin’s strong heritage in providing macro analytics give it the vital and necessary underpinnings for developing innovative investment solutions. We are excited to taking the pioneering step of offering India’s first physically backed fixed income ETF and providing an opportunity for global investors to access India in a transparent and cost-effective manner.”
The investment policy of the Fund is to closely track the performance of the ZyFin India Sovereign Owned Enterprise Bond Index based on cutting edge ZyFin research. The Fund will be distributed and traded by Sun Global Investments, a London-based wealth management firm, and it is the latest example of how the company is leading the industry through the offering of innovative, new products and high returns on investment in the emerging markets.
*Lemanik Asset Management SA, Dublin Branch is the Management Company to the Fund.
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About Sun Global Investments
Sun Global Investments Ltd. is an international financial services firm based in London, providing a full scope of services to institutional investors, corporate companies, family offices and high net worth individuals. Established in 2008, in the midst of turmoil in the financial services industry, Sun Global identified lucrative investment opportunities in emerging market corridors and has since established itself as a trusted boutique firm for investors looking to take advantage of these versatile markets. The company has three core functionaries: Wealth Advisory, Corporate Finance and Securities Trading. Wealth Advisory specialises in Portfolio Management, Lifetime Investment & Inheritance Planning and Family Office functions; Corporate Finance specialists work on M&A, Fundraising, Equity/Debt Capital markets, Restructuring and Special Situations; Securities Trading is the bedrock of the business with the team liaising with over 150 market counterparties in Fixed Income, Bonds, Equities, FX and Commodities to provide the best pricing for clients.
ZyFin Holdings Pte. Limited, through its subsidiaries is aspiring to be the premier developer of ETFs and other ‘passive’ and intelligent investment products that provide global investors superior, transparent, easily accessible and cost-effective access to attractive investment opportunities in emerging markets. Website – http://www.zyfin.com