The listing of the LAM Sun Global ZyFin India Sovereign Enterprise Bond UCITS ETF (CURY LN) – dubbed a “curry bond” by the firms – will offer British and international investors exposure to a basket of Indian public sector corporate bonds, including the Indian Railways and Indian Rural Electrification Corporation.
“We’re pleased to be able to provide global investors access to high quality bonds via this new, innovative, ETF at attractive yields at a time when developed bond markets yields are at very low levels and in fact negative in Germany or Switzerland,” said Mihir Kapadia, CEO of Sun Global Investments. “The listing reflects our view that Indian nominal yields are among the highest in the world and the macroeconomic fundamentals for India remain very attractive with India expected to overtake China next year as the world’s fastest economy.”
The fixed income ETF will be Europe’s first physically replicating Indian ETF backed by real underlying securities as opposed to notional securities or derivatives, the firms said. The fund contains bonds from ‘companies of national interest’ that are majority-owned by the government of India, so-called Sovereign Owned Enterprises (SOEs).
The corporate bonds are denominated in Indian rupees, have an AAA rating and a residual maturity between 4 to 20 years with current average maturity of 8.97 years.
The news follows Modi and Cameron’s announcement last week that London will be the international hub for accessing rupee dominated bonds.
Sanjay Sachdev, executive chairman at ZyFin, said: “The launch of the fund will give international investors the ability to invest in these difficult to access but well researched AAA rated Indian Sovereign Owned Enterprises. Building on our many years of macro analytical research expertise in this field, we see our task as offering investors around the world attractive investment opportunities.”
