***ETFs’ figures updated with data from Bloomberg via Lyxor ETF***
With just under a month until polls open for India’s general election, the Bombay Stock Exchange’s Sensex index has started to face another positive run, following a rocky start to 2019.
India has a population of just over 1.3bn with 900m people being eligible to vote. Due to the significantly high population, voting is staggered across 7 days between 11 April and 19 May. The lengthy process comes with a price. It was reported the candidates for the 2014 general election spent ¬£3.8bn, with that figure having potential to double this time around.
India is Asia’s third largest economy and has faced many issues recently including a fall in commodity prices, decline in exports and the country’s banks facing a flurry of bad loans. Despite a struggling farming industry, India is managing its inflation.
ETF AUM (¬£m) 1W % 1M %
Amundi ETF MSCI India UCITS ETF 150 5.40% 3.02%
iShares MSCI India UCITS ETF 76 5.42% 3.09%
Lyxor MSCI India UCITS ETF 942 5.41% 3.02%
Xtrackers MSCI India Index UCITS ETF 140 5.40% 3.02%
Four India ETFs had a less than positive start to the year. January saw losses of over 6% for all four ETFs, according to JustETF, before a very up and down February and then a significant jump in returns in the last week.
The two largest constituents for the four India ETFs, Reliance Industries and Housing Development Finance, account for 20% of the funds’ weighting. Reliance Industries is a holding company across numerous sectors and has jumped 7% in the last 5 days. Additionally, HDF finances the development of housing in India which has benefited from India’s recent tax cuts on housing in the country’s bid to boost real estate as the elections approach. HDF’s share price has climbed a respectable 3% over the last 5 days.
The table above shows the range of India ETFs producing minimal returns for the year despite a positive week. The ETFs didn’t maintain the same pace of recovery for the beginning of the year as the rest of the world. With having a rollercoaster of performances already this year and a lengthy general election ahead, this last week’s performance may not continue for long.
Data from Bloomberg via Lyxor ETF