The VanEck Digital India ETF is the only India-focused exchange-traded fund listed on Western stock exchanges to post gains this year. The NYSE-listed fund, which is called DGIN, has gained just 0.6% this year. But this marginal gain stands out amid an average 5% loss experienced by other ETFs this year. DGIN is also expected to rise 17.45% over the next year, according to the weighted average of constituent stock analyst price targets compiled by FactSet. VanEck says the ETF exposes investors to “companies leading the digital transformation of the Indian economy.” The fund manager says the ETF is diversified as it has 35 companies of all sizes in the “technology, telecommunications and internet applications” sectors in its portfolio. VanEck says he won’t allocate more than 8% of the portfolio to any specific stock to further minimize risk. The emerging markets fund tracks the MVIS Digital India Index. It owns companies such as India’s largest IT outsourcing giant, Infosys, as well as fast-growing competitors Uber, Zomato and Delivery. The table below shows the 19 equity ETFs selected by CNBC Pro that are traded in North America or Europe and focus on the world’s fifth-largest economy. The widespread losses in Indian markets this year contrast with the price action of last year. The benchmark NIFTY 50 index has lost 3% this year, compared to a 5.8% gain in 2022. Investment banks attribute part of the drop in share prices to rising interest rates in India . “This is happening quite quickly after deposit rates have risen as households – for whom the deposit rate is the risk-free rate – start to turn away from equities,” UBS strategist Sunil Tirumalai said in a statement. note to customers. “We believe this will remain the dominant theme defining the direction of Indian markets in the near term.” Shares were also battered after short seller Hindenburg Research alleged fraud at Indian conglomerate Adani Enterprise in January. While Adani Group has dismissed the allegations, the debacle has soured sentiment among foreign investors. “The uncertainties surrounding the Adani Group and their large amount of outstanding dollar bonds may negatively impact investor sentiment toward Indian credit,” said Rahul Jain, head of India research at Goldman Sachs. , in a note to clients on Feb. 9. However, short-term turmoil in Indian markets has not thwarted long-term bulls in the Indian economy, according to Dutch bank ING. While momentum remains strong at an annualized GDP growth rate of 6.7%, ING also forecasts growth above 6% in 2023. CNBC Pro did not include the Canadian-listed iShares India index ETF and the ETF BMO MSCI India ESG Leaders index and US-listed VanEck India Growth Leaders ETF due to a lack of price targets from FactSet.
