Is Now the Time To Consider India ETFs?

Earlier this year, the investing world buzzed with excitement over the reopening of China and its economy. Which led many to believe it was a promising bet for emerging market investments. However, as expectations for China’s economy cooled in both the short and long term, investors are now seeking alternative avenues to invest in emerging markets.

One such avenue gaining attention is India. Recently, India became the world’s fifth-largest economy and most populous country. It also boasted one of the best-performing stock markets in the second quarter of 2023. In fact, some experts and analysts have begun to wonder if India could become the next China.

Several ETFs offer targeted exposure to the burgeoning Indian economy. In this article, we will dive into four top-performing India ETFs, exploring their key characteristics.

Top YTD India ETF Performers

The Columbia India Consumer ETF (INCO) focuses on companies in the country’s consumer industries. With an expense ratio of 0.75%, INCO has seen a YTD return of 15.32% and a one-year return of 18.02%, showing positive growth and performance over the past year. Its AUM stands at $91.0 million, suggesting it has a somewhat well-established presence in the market. Targeting India’s growing consumer class and recording one of the highest YTD returns among India ETFs, INCO is an attractive option for investors.

The India Internet & E-commerce ETF (INQQ) focuses on companies in the e-commerce industry in India, tapping into the country’s consumer market in a way similar to that of INCO. However, with an expense ratio of 0.86%, this ETF is a more expensive option compared to INCO. Making its debut just over a year ago, INQQ has an AUM of $5.1 million. The fund has seen positive net flows in the past month of $2.63 million, indicating increased investor interest.

INQQ has a strong three-month return of 25.08% and a YTD return of 16.87%, indicating a very positive trajectory. With a focus on the e-commerce industries, there is a strong possibility for potential growth in this ETF. Despite being a relatively new product, and having a small number of assets, INQQ offers attractive investment opportunities for investors seeking exposure to a particular cross-section of India’s market.