Global X, the New York-based provider of exchange-traded funds, announced the launch of two actively managed emerging market funds: The Global X India Active ETF (NDIA), and the Global X Brazil Active ETF (BRAZ).
While passive funds tracking indexes in the two countries have proved popular for long, active managers have always sought to highlight how tracking indexes missed out on a large portion of those sprawling markets valued at $3.6 trillion in Mumbai and $810 billion in Sao Paulo. High conviction trading ideas often emerge in these countries among companies not included in the big indexes.
“The opportunity for investors in both India and Brazil is significant, as both of these major economies evolve and enter cycles of domestic consumer-driven growth,” said Malcolm Dorson, senior portfolio manager and Head of Emerging Markets Strategy at Global X ETFs.
According to the company, growth in India continues to benefit from favorable structural reforms, strong government spending, and attractive labor costs. With attractive demographics, a strong education system, and a democratic governance system, they believe India represents one of the top structural opportunities in the world.
“India is a very sound story for the next few decades,” said Dorson. “It’s the best structural story, and not holding it now is the same as not owning China 20 years ago.” Economic Analysts project that India will grow at least 1.5 percentage points faster than China over the next two years. It’s also benefiting from so-called friend-shoring opportunities, by cornering some of the high-technology manufacturing business that’s moving out of China.
The NDIA fund is overweight financials and consumer staples, and underweight materials, utilities and energy. It’s betting on names including SBI Life Insurance Co., Shriram Finance Ltd., Nestle India Ltd. and Apollo Hospitals Enterprise Ltd.
