Simplify Launches Active India ETF, Firm's First International ETF

Simplify Asset Management expands its lineup with the addition of an active India ETF, the firm’s first international fund.

The New York-based firm teamed up with System Two Advisors to launch the Simplify Tara India Opportunities ETF (IOPP), listed on the NYSE Arca on March 5. India is one of the fastest-growing major economies in the world, with GDP forecasted to top 6% percent over the next five years, according to a statement from the firm.

IOPP is the first ETF to make System Two Advisors’ depth and breadth of local expertise in India broadly available. System Two Advisors is an “established asset manager with an innovative approach to equity returns forecasting,” according to the firm.

In constructing the IOPP portfolio, System Two Advisors focuses on bottom-up research, according to the statement. The firm evaluates key aspects of every company under consideration for inclusion in the portfolio, including business moat, growth drivers, management quality, and future growth potential.

The firm’s 70 on-the-ground in-market personnel across India supports that research. This provides  a concentrated, high-conviction portfolio of 25-40 specific names with high active share, according to the statement.

Investors Looking for Active Exposure to India in an ETF Wrapper

“We’re seeing growing investment focus on India as China’s experiencing relatively weakness. However, not all India-focused ETFs are the same,” said Todd Rosenbluth, head of research at VettaFi.

IOPP’s active management sets it apart from category peers. To truly capture the India growth story, an actively managed approach is a must, Anupam Ghose, managing partner at System Two Advisors, said.

It’s not surprising investors are paying more attention to the role India can play in an international equity portfolio. However, it is surprising how investors have gravitated toward passive India exposures, Ghose said. Large, globally oriented stocks often dominate passive funds.

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