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Nippon Life India Asset Management has joined hands with DWS, a global assets under management company, to list Indian Government Bond Exchange Traded Fund in Europe.
The market size for securities issued by the Indian government is at over $1 trillion as of August. This ranks it between Canada and Spain, in the emerging markets local currency space, and is second only to China’s treasury market.
The rupee-denominated government bonds are not included in flagship indices, such as Bloomberg Global-Aggregate or JP Morgan Government Bond – Emerging Markets Global Diversified, due to limited liquidity and accessibility.
The ETF launched will track JP Morgan India Government Fully Accessible Route (FAR) Bond index, which is based on the performance of fixed-rate Indian rupee-denominated Indian government bonds, that have been made eligible for investment to non-residents under the Fully Accessible Route.
The FAR is a separate channel established by the Reserve Bank of India, in consultation with the Government of India, through which eligible investors can invest in specified government securities without any investment ceilings. The instruments comprise FAR-eligible fixed-rate and zero-coupon bonds.
Nippon Life India Asset Management (Singapore), a wholly-owned subsidiary of Nippon Life India Asset Management, through this collaboration, provides portfolio management and investment advisory services to the European-listed Indian Government Bond ETF.
Sundeep Sikka, Executive Director and CEO at Nippon Life India Asset Management, said the product will provide access to India’s growth story to DWS’ investor base. Long-term track record and deep understanding of the Indian capital market and ETF segment can be leveraged further through this opportunity. This collaboration with DWS can go a long way in attracting global allocations into India, he said.
Michael Mohr, Head of Product Specialists Passive at DWS, said clients will get access to attractive Indian bond market while Nippon Life will bring in its deep knowledge of the Indian Fixed-Income market.
Building on more than 60 years of experience, DWS Group with 833 billion euros of assets under management, has developed a reputation for excellence in Germany, Europe, the Americas and Asia.
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