BlackRock Debuts Europe’s Lowest-Fee India Government Bond ETF

BlackRock has entered the rupee sovereign space with Europe’s lowest-fee Indian government bond ETF.

The iShares India INR Govt Bond UCITS ETF (INGB) is listed on Euronext Amsterdam with a total expense ratio of 0.35%.

INGB is the fifth India government bond ETF in Europe after the L&G India INR Government Bond UCITS ETF (TIGR) launched in October 2021 with an expense ratio of 0.39%.

UTI Funds debuted the UTI India Sovereign Bond UCITS ETF (UIGB) a month later, with an expense ratio of 0.50%, followed by DWS entering the space in September 2022 with the Xtrackers India Government Bond UCITS ETF (XIGB), carrying a TER of 0.38%.

Tabula Investment Management then launched Europe's first short duration Indian government bond ETF in January, the Tabula FTSE Indian Government Bond Short Duration UCITS ETF (TIND), with a TER of 0.39%.

The LAM Sun Zyfin India Sovereign Enterprise Bond UCITS ETF was the first to launch in 2016, but closed a year later on low demand.

INGB: New iShares India Government Bond ETF

INGB physically replicates the Bloomberg Indian Government FAR Bond index of 11 Indian rupee-denominated, fixed-rate nominal Treasury bonds issued by the Indian government.

Bonds must also be included within the Fully Accessible Route (FAR) scheme for foreign investor access, have a minimum remaining maturity of at least a year and a minimum issue size of ₹10bn ($120m), to be eligible for inclusion.

INGB boasts a weighted average yield to maturity of 7.03% and an effective duration of 6.52 years.

BlackRock Committed to Range of Fixed Income ETFs

Commenting on the launch, Brett Pybus, global co-head of iShares fixed income ETFs at BlackRock, said: "We are committed to providing our clients choice via a range of bond exposures to fit their portfolio needs.”

“We are delighted to offer a cost-efficient and transparent access vehicle for Indian government bonds, a key component of global emerging markets."

The launch comes after JP Morgan announced last September that Indian government bonds with a combined value of $330bn would be added to the JP Morgan GBI-EM Global Diversified index from June 2024.

It also follows Bloomberg announcing in January it had begun consulting the market on whether to add 32 Indian securities to the Bloomberg Emerging Market (EM) Local Currency index – at a weight of up to 6.99% - as well as the Bloomberg Emerging Market 10% Country Capped index.