INCO: India Consumer ETF Begins Trading

August 17, 2011 by  
Filed under Commentary, ETF IPOs (New ETFs)

Emerging Global Advisors rolled out the first in a planned series of India sector ETFs on August 10, 2011.  EGShares India Consumer ETF (INCO) tries to replicate the INDXX India Consumer Index, a 30-stock free float adjusted market capitalization index targeting India’s consumer sector.

The underlying index, started in April 2007, has a current yield of 1.6%.  It holds stocks from a wide range of industries including Automobiles 15.1%, Personal Products 15.1%, Media 10.2%, Textiles Apparel & Luxury Goods 10.0%, Food Products 8.9%, Beverages 7.3%, Hotels Restaurants & Leisure 7.3%, Household Products 5.7%, Chemicals 5.5%, and others 14.9%.

INCO’s 30 holdings are listed on India’s National and Bombay stock exchanges.  Most cannot be bought or held directly by US investors.  Top holdings include Asian Paints 5.6%, Hero Motorcorp 5.3%, Hindustan Unilever 5.3%, Titan Industries 5.0%, Nestle India 4.9%, ITC 4.9%, and Colgate Palmolive India 4.9%.  Additional details can be found in the fact sheet (pdf).

The new ETF’s expense ratio is capped at 0.89% (the 0.85% indicated in the footnotes of the summary page appears to be an error).  Interestingly, the press release (pdf) never mentions the fund by name, always referring to it as INCO.

INCO is the first of several India-focused sector funds EGA plans to launch this year.  EGA previously released two other India ETFs last year: EGShares India Infrastructure ETF (INXX) and EGShares India Small Cap ETF (SCIN).  The prospectus (pdf) covers eight unannounced ETFs in addition to INCO and the recently introduced EGShares Emerging Markets High Income Low Beta ETF (HILO).  Those still to come are:

  • EGShares India Basic Materials ETF (INBA)
  • EGShares India Energy ETF (INEN)
  • EGShares India Financials ETF (INFS)
  • EGShares India Health Care ETF (INHK)
  • EGShares India Industrials ETF (INID)
  • EGShares India Technology ETF (INQQ)
  • EGShares India High Income Low Beta ETF (INLH)
  • EGShares Emerging Markets Food and Agriculture ETF (EATS)

Disclosure covering writer, editor, and publisher:  No positions in any of the securities mentioned.  No positions in any of the companies or ETF sponsors mentioned.  No income, revenue, or other compensation (either directly or indirectly) received from, or on behalf of, any of the companies or ETF sponsors mentioned.

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