With the continuing innovation in the ETF landscape, the announcement of the India Infrastructure ETF (INXX), the first sector-specific India fund to track the nation’s infrastructure sector, could be the answer to reaping the benefits of a sector that is destined to shine.
EGShares' newest ETF carries an expense ratio of 0.85% and seeks to replicate the performance of the Indxx India Infrastructure Index, which is a benchmark that consists of 30 different companies that are influenced by the infrastructure sector. As for sector allocations, nearly 23% of the ETF's assets are allocated to electricity companies, 19% to construction and materials companies and 14% to industrial metals and mining.
India’s infrastructure sector is set for accelerated growth due to the country’s rapid growth and its relatively feeble infrastructure. The Asian nation is expected to see substantial GDP growth over the next few years and will need upgraded infrastructure to sustain it. Additionally, India is expected to see rapid population growth over the next 20 years and is witnessing a ballooning middle class which will likely demand upgraded infrastructure and a better way of life.
To further bolster the appeal of India’s infrastructure sector, nearly one in every three Indians lives in urban areas, which paves the trend for urbanization and the need for better roads, more water and increased electricity.
Lastly, the Indian government has addressed the need for upgraded infrastructure and has already pledged to spend more than $1 billion over the next five years on improving infrastructure in its nation.
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