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LGIM launches Europe’s first local currency Indian government bond ETF

Theo Andrew

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Legal & General Investment Management (LGIM) has launched the first European ETF to offer exposure to the Indian government bond market in its local currency.  

The L&G India INR Government Bond UCITS ETF (TIGR) will be listed on the London Stock Exchange, Deutsche Boerse and Borsa Italiana with a total expense ratio (TER) of 0.39%.  

TIGR will track the JP Morgan India Government Fully Accessible Route (FAR) Bonds index which offers investors exposure to a market that has experienced rapid growth in recent years and the sixth largest economy in the world.  

Traditionally a difficult exposure to access, Lee Collins, head of fixed income at LGIM, said that Indian authorities have made it easier for foreign investors to access the market.  

“The country has been on a path to be included across major fixed income indices. We think it is now an appropriate time to offer this product to investors,” he said.  

“India is the second biggest emerging market and the six largest economy in the world, and investors can benefit from accessing a growing sovereign bond and investment-grade market with attractive yields and potential diversification from other fixed income markets.”  

LGIM added the ETF could offer a diversification benefit from other fixed income markets due to its historically low correlation between local currency Indian bonds and other emerging and developed market debt.  

James Crossley (pictured), head of UK retail sales at LGIM added: “Thanks to its UCITS structure, the Fund will give investors easy access to a complex and a highly regulated market, without having to deal with a complex currency or hire a tax adviser or local broker.” 

The arrival of TIGR follows a Morgan Stanley note published in September, in which the company predicted Indian bonds would be added to JP Morgan’s government bond index-emerging markets (GBI-EM) and Global Aggregate benchmarks ranges before February 2022. 

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