HANetf is launching an ETF giving investors exposure to India’s rapid digitalisation, with an ESG screening.

The INQQ India Internet & Ecommerce ESG-S Ucits ETF is designed to tap into the communications sector expansion of the world’s second most populous country, as the IMF expects the country’s economy to grow by 6% this year, and be the fastest growing major economy in both 2023 and 2024.

India’s economic growth has translated into stock market returns. Over the past five years, India’s BSE SENSEX index has returned 93% compared with the S&P 500’s 58%.

With growth led by an expanding middle class, the country’s digital infrastructure has expanded significantly, with over 98% of the country’s population able to access 4G. 

This, coupled with the increased spending power of consumers, has translated to 7 million new smartphone users a month. India’s internet economy is now poised to outgrow the country’s broader GDP. 

INQQ seeks to capture this consumer-led digital revolution. It will track INQQ The India Internet & Ecommerce ESG Screened Index (INQQ ETF), which is ESG-screened and has 100% exposure to Indian companies. 

Holdings are screened to ensure at least 50% of their revenue comes from internet and/or ecommerce. Given that many Indian companies are difficult to find if listed locally, INQQ will offer investors targeted exposure to India’s digitisation.

Kevin Carter, founder and chief investment officer of EMQQ Global, said: “More than a billion consumers in India are only just beginning to go online. This booming consumer momentum, coupled with the country’s strong dedication to scaling physical and digital infrastructure in the coming years, is creating a compelling growth opportunity. 

“The India internet investment story is one that cannot and should not be ignored. INQQ will allow investors to tap into the foundation of this growth being powered by the smartphone-enabled digital consumer.”

Hector McNeil, co-founder and co-CEO of HANetf, added the INQQ ETF will provide a way for investors to capture this exciting segment of the Indian market. 

“Many broader indices include state owned enterprises, which historically have been a drag on growth whereas ecommerce business tend to be entrepreneur led,” he said.

HANetf and EMQQ Global previously partnered to launch EMQQ Emerging Markets Internet & Ecommerce Ucits ETF in 2018, which provides exposure to the growth of online consumption in the developing world. 

Both EMQQ and INQQ have US-listed sister ETFs, with approximately $470m AUM on aggregate. The Ucits version of EMQQ is currently at $170m AUM.