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HSBC AM launches India tech ETF

HITC tracks the S&P India Tech index

Theo Andrew

India arch on beach

HSBC Asset Management has expanded its thematic range with the launch of an India tech ETF.

The HSBC S&P India Tech UCITS ETF (HITC) is listed on the London Stock Exchange, Euronext Italia and Deutsche Boerse with a total expense ratio (TER) of 0.65%.

HITC tracks the S&P India Tech index which offers exposure to tech stocks in one of the world’s fastest-growing economies.

The index leverages FactSet’s Revere Business Industry Classifications System (RBICs) which aims to track the tech sector using a revenue-based approach.

Companies eligible for inclusion must derive more than 80% of their revenue from communications, digital tech and software-related activities, providing exposure to India’s fastest-growing sectors.

Revenue in the Indian tech sector surpassed $200bn in 2022, a 15.8% increase on the previous year, and is expected to top $500bn by 2030, according to a NASSCOM report.

India has become a dominant force in emerging markets and although it remains behind China in size, the weighting between the two countries in the MSCI Emerging Market index fell to its lowest point following last month’s rebalance.

The country's talent pool, start-up ecosystem and global software firms have asset managers including BlackRock taking an overweight position on the market.

Olga de Tapia, global head of ETF and indexing sales at HSBC AM, said: “India is fast becoming a hot bed of new world technology sectors offering exciting investment opportunities, having transitioned from its previous model as a heavy exporter of SAAS (software as a service) to develop more innovative tech solutions.

"The launch supports our conviction in the underlying strength of the Indian market and HSBC AM’s broader strategy of offering clients best in class investment solutions with a specialism in emerging markets.”

HITC’s top 10 holdings are led by IT company Infosys with a 14.1% weighting, followed by HCL Technologies (10.8%), Bharti Airtel (10.7%) and Tata Consultancy Services (10%).

Last November, HANetf launched the HANetf INQQ India Internet & Ecommerce ESG-S UCITS ETF (INQP) which has a TER of 0.86%.

There are several other non-sector-focused Indian equity ETFs in the market including the $3.7bn iShares MSCI India UCITS ETF (IIND), which has returned 36.8% over the past year.

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