DWS unveils Indian government bond ETF

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XIGB becomes only the second ETF in Europe to offer this exposure

DWS has launched an ETF offering exposure to the Indian government bond market in its local currency.

The Xtrackers India Government Bond UCITS ETF (XIGB) is listed on Deutsche Boerse with a total expense ratio (TER) of 0.38%.

XIGB tracks the JP Morgan India Government Fully Accessible Route (FAR) Bonds Index of market-cap-weighted, rupee-denominated Indian sovereign debt.

Constituents have a minimum issue size of $1 billion and must have a remaining maturity of more than two and a half years to be included.

They must also be available through the FAR program, which makes them eligible for non-residents without investment limits.

The index includes fixed-rate, zero-coupon bonds while excluding bills, floating-rate bonds, capitalization or amortizing bonds, bonds with callable, puttable or convertible characteristics and those not classified in FAR.

XIGB becomes the second European ETF to offer Indian sovereign exposure in local currency following the launch last October of the $301 million L&G India INR Government Bond UCITS ETF (TIGR), tracking the same index.

The new DWS entrant comes within a fortnight of JP Morgan announcing a new round of consultations to include India in its GBI-EM Global Diversified Index after the Reserve Bank of India removed restrictions on the ownership of foreign investors in Indian debt in March 2020.

The country’s inclusion in JP Morgan’s benchmark could generate an estimated $30 billion in market inflows and more than $170 billion over the next decade, according to Morgan Stanley.

FTSE Russell has also placed Indian sovereign debt on its watchlist for inclusion, which it is expected to review in October.

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