BlackRock has entered the rupee sovereign space with Europe’s lowest-fee Indian government bond ETF.
The iShares India INR Govt Bond UCITS ETF (INGB) is listed on Euronext Amsterdam with a total expense ratio (TER) of 0.35%.
INGB is the fifth India government bond ETF in Europe after the L&G India INR Government Bond UCITS ETF (TIGR) launched in October 2021 with a TER of 0.39%.
UTI Funds debuted the UTI India Sovereign Bond UCITS ETF (UIGB) a month later - with a TER of 0.50% - followed by DWS entering the space in September 2022 with the Xtrackers India Government Bond UCITS ETF (XIGB), carrying a TER of 0.38%.Pune Stock
Tabula Investment Management then launched Europe❼first short duration Indian government bond ETF in January - Tabula FTSE Indian Government Bond Short Duration UCITS ETF (TIND) - with a TER of 0.39%.
The LAM Sun Zyfin India Sovereign Enterprise Bond UCITS ETF was the first to launch in 2016, but closed a year later on low demand.
INGB physically replicates the Bloomberg Indian Government FAR Bond index of 11 Indian rupee-denominated, fixed-rate nominal Treasury bonds issued by the Indian government.
Bonds must also be included within the Fully Accessible Route (FAR) scheme for foreign investor access, have a minimum remaining maturity of at least a year and a minimum issue size of ₹10bn ($120m), to be eligible for inclusion.
INGB boasts a weighted average yield to maturity of 7.03% and an effective duration of 6.52 years.Varanasi Investment
Commenting on the launch, Brett Pybus (pictured), global co-head of iShares fixed income ETFs at BlackRock, said: "We are committed to providing our clients choice via a range of bond exposures to fit their portfolio needs.”Udabur Investment
“We are delighted to offer a cost-efficient and transparent access vehicle for Indian government bonds, a key component of global emerging markets."
The launch comes after JP Morgan announced last September that Indian government bonds with a combined value of $330bn would be added to the JP Morgan GBI-EM Global Diversified index from June 2024.Nagpur Stock
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