Investing in the Digital Boom in India with KEMX | ETF Trends

An arm of Reliance Industries has announced a partnership with U.S.-listed company Sanmina, an electronics manufacturer, to build an electronics manufacturing hub in India. Reliance has said that it is committing up to $220 million to the joint venture as it seeks to capture the meteoric growth of digital consumption in India, reported Forbes.

The digital economy in India is currently growing 50% a year and is expected to reach $1 trillion due to the growing availability of internet within the country and consumption of digital content. The deal is one that is looking to bring high-tech manufacturing opportunities to India as the country seeks to be more self-reliant in cloud services, 5G, IT, data centers, new energy, and more.

“Through this partnership, we plan to boost innovation and talent in India, meeting both Indian and global demand,” Akash Ambani, director of Reliance Jio, the technology unit of Reliance Industries, said.

Reliance is set to have a 50.1% stake in the venture in a deal expected to close by September 2022.

Emerging Markets Focus

For investors looking to capture the innovation and growth of large- and mid-cap companies within emerging markets like India but either already have a separate China allocation or are looking to sidestep exposure to China, the KraneShares MSCI Emerging Markets ex-China Index ETF (KEMX) is a good solution.

KEMX seeks to track the MSCI Emerging Markets ex-China Index, a free float-adjusted, market-cap-weighted index that includes large- and mid-cap companies from emerging markets, excluding Chinese issuers. Securities contained are in the top 85% of their emerging market.

To determine a security’s country, where it is incorporated and where it is listed are considered first. For securities that have a primary listing outside of the country it is incorporated in, any secondary listings, the geographic location of shareholders and operations, location of headquarters, its history, and which country investors associate with the issuer are all considered.

Reliance Industries has a 2.03% weighting in the fund.

KEMX has an expense ratio of 0.23%, with fee waivers that expire on August 1, 2022.

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