3 India ETFs in direct comparison-which one fits the individual investment strategy best? (Photo: Freepik)
India is one of the most dynamic economies in the world – and the stock market is also growing. Ucits ETFs offer an attractive option for investors who want to benefit from the boom on the subcontinent inexpensive and easily from boom on the subcontinent. Whether widespread over the MSCI India or focuses on the heavyweights in NIFTY 50-here you will find the right ETF solutions, your structure, cost structures and which strategy for which investor type.
Ishares Msci India Ucits ETF-wide diversified for long-term investors
The Ishares Msci India Ucits ETF (ISIN: IE00BZCQB185) is one of the most popular India ETFs on the European market-and for good reason: it offers a broad exposure on the MSCI India Index, which includes around 110 large and medium-sized companies. This makes it significantly wider than the Nifty 50 and better reflects India’s economic diversity.
In addition to the usual heavyweights such as Reliance Industries, Infosys or HDFC Bank, there are also high-growing MID caps that are missing in classic large cap indices.
In contrast to many competitors, Ishares relies on physical replication in this product. This means that the stocks contained in the index are actually bought – as far as possible. For investors, this is a plus in terms of transparency and trust. Especially in emerging countries, where swap constructions are partly seen critically, the physical structure is an important argument for many investors.
However, the ETF also has a catch: with a total cost rate (ter) of 0.65 percent, it is not one of the cheapest products on the market. Although the running costs are below many actively managed India funds, compared to other ETFs-such as the Franklin FTSE India-the Ishares ETF is noticeably more expensive. Nevertheless, it convinces with its proximity to the market, high liquidity and broad scatter.
Xtrackers Nifty 50 Swap Ucits ETF – The Heart of the Indian economy
If you want to invest in a targeted manner in the heavyweights of the Indian stock market, without dealing with individual or active fund selection, you can find in Xtrackers Nifty 50 Swap Ucits ETF (Isin: LU0292109690) an established solution. The ETF depicts the NIFTY 50 index – one of the two guiding indications of India – and thus grants a concentrated exposure on the 50 most important listed companies in the country.
The NIFTY 50 includes industry sizes such as HDFC Bank, Reliance Industries, Infosys, Tata Consultancy Services or Icici Bank. These companies represent the modernization and economic diversification of India – from financial services to technology to consumer goods. International investors in particular appreciate the index because of its high liquidity and stability.
However, the ETF of Xtrackers does not depict this index physically, but synthetically-via a so-called swap business. A opponent (mostly a large bank) undertakes to deliver the index return, while ETF holds different collateral. For investors, this means: a precise replica of the index without tracking differences, but with a certain risk of opposite risk, which is secured by regulatory requirements (for example, placing daily collateral).
What is striking – and surprising for many investors – is the comparatively high total cost rate of 0.85 percent p. A .. This means that the ETF is one of the most expensive index funds on a threshold index. The costs are contrasting to the perception of many investors that Xtrackers products are particularly cheap. Nevertheless, the ETF has a popular vehicle because it efficiently depicts one of the most noticed index barometers of India and thus offers a clearly outlined investment focus.
Franklin FTSE India Ucits ETF – price breaker with clever index election
If you want to bring India to the depot as cheaply as possible, sooner or later ends up at the Franklin FTSE India Ucits ETF (ISIN: IE00BHZRQZ17). With a total cost rate of only 0.19 percent, it is one of the cheapest India ETFs on the market-and is therefore a real insider tip for cost-conscious investors. The low ter is part of the Franklin strategy to offer cost-efficient alternatives to more established providers with its passive ETF family-without compromises in quality.
The ETF physically depicts the FTSE India 30/18 Capped Index. This differs easily from other common India indices such as the MSCI India. The upper limit of 18 percent per single title is particularly striking, which prevents too strong concentration on individual heavyweights such as Reliance Industries or HDFC Bank. This creates a somewhat more balanced weighting within the portfolio – an advantage for investors who want to reduce clump risks.
The industry diversification is also balanced: In addition to finances and IT, the fund also covers sectors such as industry, consumption and communication. The product is fully replicated, physically invested and is updated regularly-the tracking difference to the underlying index remains constantly low.
Conclusion: 3 ETFs, 3 ways – which fits which investor type?
The 3 India ETFs open access to one of the most dynamic growth markets in the world-each with their own profile. The Xtrackers Nifty 50 is ideal for investors who rely on India’s blue chips but can live with higher costs. The Ishares MSCI India offers broad diversification and physical replication – a solid choice for long -term investors. The Franklin FTSE India convinces as the cheapest solution with efficient index construction.
In short: Xtrackers for focused, ishares for width, Franklin for price -conscious – all 3 are valid ways to participate in Indian growth. The choice depends on the individual style of investment, the willingness to take risks and preferences in terms of index structure and replication.
Disclaimer:
No investment advice. No call to buy or sell securities.