EMQQ Global introduced the India Internet and Ecommerce ETF (NYSE Arca: INQQ) earlier this week.
That makes INQQ the newest member of the U.S.-listed India exchange traded funds group. More importantly, the latest fund from the issuer of the Emerging Markets Internet & Ecommerce ETF (NYSEArca: EMQQ) and the Next Frontier Internet & Ecommerce ETF (FMQQ) could prove particularly well-timed.
That claim is rooted in the notion that India’s e-commerce opportunity set is expansive and more related companies in the country are achieving unicorn status. That could pave the way for INQQ to add more stocks to its portfolio as more of those unicorns go public. INQQ follows the India Internet and Ecommerce Index and holds about 20 stocks. The rookie ETF could be an ideal way to capitalize on India’s favorable demographic trends.
“The India Internet & Ecommerce ETF (NYSE: INQQ), is designed to provide investors with targeted exposure to the Internet and Ecommerce sectors in India. Armed with 27% of the worlds Gen -Z population, a middle class set to double by 2030, and 25 million new smartphone users added every quarter, the stage is set for the country to enter a golden age of digitization,” according to the fund’s issuer.
Obviously, investors considering a fund like INQQ are looking for growth. That growth potential isn’t hard to find. E-commerce penetration in India is currently around 5%. That’s small relative to China and just a fraction of what’s found in developed economies.
“With India’s swelling middle class of youthful digitized consumers hungry for modernization serving as a catalyst, these innovative companies are just now beginning to go public and join the ranks of INQQ,” adds the issuer.
Adding to the growth opportunity menu is the fact that 92% of INQQ’s holdings are mid- or small-cap stocks. Compare that with equivalent China or U.S. funds, which typically devote a comparable percentage to large-cap equities.
INQQ also offers some depth, meaning that it’s not solely dependent on e-commerce stocks. That asset class represents 25.7% of the fund’s portfolio, while fintech stocks are right behind at 25%. Travel-related and online advertising names combine for 27.3% of the new ETF’s portfolio.
INQQ is a cap-weighted ETF, and when stocks are added to its underlying index, they are capped at 8% weights.
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The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.