Welcome to ETFs Around the World, Selfwealth's new four-part series that takes a closer look at some of the most compelling regional ETFs on the market today. As global markets continue to evolve, investors have a unique opportunity to rethink their strategies and tap into high-potential growth areas outside of their home countries. In this special mini-series, we'll dive deep into ETFs that focus on Japan, India, and Europe, comparing two top-performing funds from each of these regions. In the final article, we'll zoom out to compare two leading global equity ETFs, offering a broader perspective on how international funds stack up on the global stage. 

This series isn’t about picking winners – it's about exploring new angles and considering how regional dynamics could shape your ETF portfolio as we head into 2025. Whether you're already familiar with these markets or are looking for fresh insights, we’ll help you navigate the evolving landscape of international ETFs with a new lens. 

It is important to always do your own research before making decisions to invest and that past performance is not an indicator of future performance. 

This article was produced 22 November 2024. 

Key takeaways: 

• The Betashares India Quality ETF seeks to track 30 ‘high quality’ businesses, while the Global X India Nifty 50 offers exposure to 50 of the largest and most liquid publicly traded companies from the Indian share market’s benchmark index. 

• While the Financials sector is the most represented theme for both funds, this sector accounts for a far higher level of net assets in NDIA, which is also more heavily concentrated among its top 10 holdings. 

• Based on historical performance data, IIND has delivered superior returns over the last one and three years, as well as since inception, but NDIA outperformed across the last five years. 

• The management fee charged by each fund is notably higher than the ASX ETF average, albeit NDIA has a lower fee, notwithstanding the fact it targets one distribution per year as opposed to IIND’s semi-annual distributions. 

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In this edition of our ETFs Around the World series, we’re turning our attention to India. The world’s fifth largest economy by nominal GDP, India has long been recognised as an influential economic landscape. 

With a particular emphasis on services activities, the country’s GDP is overwhelmingly underpinned by domestic consumption. India is recognised as one of the world’s largest consumer markets, while also considered one of the leading countries for both importing and exporting activity. 

How might investors gain exposure to the many developed and emerging opportunities across the Indian stock market?  

The Betashares India Quality ETF (ASX: IIND) and the Global X India Nifty 50 ETF (ASX: NDIA) are two ASX-listed funds offering exposure to this market, and the subject of this head-to-head analysis. 

Fund Objective 

The first of the two funds under comparison, the Betashares India Quality ETF, aims to track the performance of the Solactive India Quality Select Index NTR, before fees, expenses, and taxes.  

As such, the IIND ETF is designed to track a diversified portfolio of shares that Betashares deems “the highest quality Indian companies.” More specifically, this extends to 30 companies, with the key metrics for selection including high profitability, low leverage, and high earnings stability. 

With a slightly different focus, the Global X India Nifty 50 ETF “offers access to 50 of the largest and most liquid publicly traded companies in India”, which spans across various economic sectors.  

The Global X NDIA ETF seeks to provide returns that correspond to the price and yield performance, before fees and expenses, of India’s benchmark market index, the NSE Nifty 50 Index.  

Fund Profiles  

Data contained in the October 2024 ASX Investment Products monthly update indicates that both funds recorded net inflows through the month. 

At the end of October 2024, the Betashares India Quality ETF was responsible for $229.7 million in funds under management (FUM). During the month, FUM grew by $3.3 million, albeit net inflows totalled $7.3 million for the month. The Betashares IIND ETF was first admitted to the ASX in August 2019.  

In contrast, the Global X India Nifty 50 ETF, which has been an ASX-listed security since June 2019, has a smaller pool of net assets. Its FUM was $183.3 million as at October 31, 2024. NDIA recorded an $8.3 million increase in FUM during October, with its net inflows higher than IIND at $9.1 million. 

As far as last month’s trading, across all ASX trading (broker) participants, IIND recorded 4,324 trades valued at a total of $23.3 million. NDIA recorded 2,628 trades worth $20.3 million. Average trade sizes were $5,391 and $7,736, respectively. Monthly liquidity was reported as 10.15% and 11.09%, respectively. 

 Fund Holdings 

While there are various common holdings across the two ETFs, the sector breakdown for each fund offers notable contrast. 

For starters, NDIA is heavily skewed towards financials. Shares from this sector account for over one-third of the fund’s net assets. In comparison, this figure is closer to one-fifth for IIND, which instead offers more balanced exposure across the Consumer Discretionary, Information Technology, Industrials, and Consumer Staples sectors. 

^ = as at October 31, 2024 

* = as at November 22, 2024 - rounded to one decimal place 

Meanwhile, the top 10 holdings of each ETF are shown below. In the case of the Betashares India Quality ETF, this cohort accounts for 46.9% of the fund’s net assets. On the other hand, the top 10 for the Global X India Nifty 50 ETF represents 57.0% of its net assets. 

Despite NDIA featuring more holdings than IIND — in total, 50 versus 30 — exposure in the former is more heavily concentrated among its top 10 holdings. 

^ = as at November 21, 2024 - rounded to one decimal place 

* = as at November 22, 2024 - rounded to one decimal place 

Performance and Distributions 

As at October 31, 2024, the Betashares India Quality ETF had delivered a return of 16.62% over the prior 12 months. Looking further back, IIND delivered an average return of 8.85% per annum over the preceding three-year period, and an average return of 9.12% per annum across the last five years. The fund, trading since August 2019, has returned 10.23% per annum since inception.  

Over the last one, three, and five years, the Global X India Nifty 50 ETF returned 14.32%, 7.71% per annum, and 9.89% per annum, respectively. Since inception, the fund has yielded an average return of 9.06% per annum. These figures are taken over the relevant times up to November 21, 2024.   

When it comes to distributions, investors should note a difference with respect to intended payouts to unitholders. Betashares seeks to pay semi-annual distributions to unitholders in IIND, whereas Global X targets an annual distribution to unitholders in NDIA. 

As is the case with any exchange-traded fund, the amount and timing of distributions will vary from period to period, and there may even be periods where no distributions are made. 

Fees 

By relative standards, the fees and costs associated with these two funds are higher than most other ASX-listed ETFs.  

In the case of the Betashares India Quality ETF, the fund manager imposes a management fee and cost of 0.80% per annum. By way of contrast, the Global X India Nifty 50 ETF features a management cost of 0.69% per annum.  

Management fees are calculated in relation to the net asset value (NAV) of each fund daily, and prospective investors should note that other fees may apply.  

Please refer to the relevant Product Disclosure Statements for up-to-date details on costs and expenses, which may be deducted from the fund’s assets as and when they are incurred.  

Summary 

Both launched in 2019, the Betashares India Quality ETF has outpaced the Global X India Nifty 50 ETF to amass a higher volume of net assets. The two funds offer exposure to the Indian share market, but while IIND seeks to track 30 ‘high quality’ businesses, NDIA targets 50 of the largest and most liquid publicly traded Indian shares. Compared with Betashares IIND, the NDIA ETF has a heavier weighting towards the Financials sector, and its assets are more concentrated among its top 10 holdings. 

When it comes to performance, the head-to-head record is mixed. IIND has delivered a higher return than NDIA when assessed over the last one and three years, as well as since inception. However, Global X NDIA has outperformed Betashares IIND over the last five years. NDIA also charges a lower management fee at 0.69% p.a. versus 0.80% p.a., albeit the Global X fund targets just one distribution per year, compared with two for the Betashares India Quality ETF.  

Past performance is not an indicator of future performance, and it is important to always do your own research before making decisions to invest.  

For more information, you can read about the Betashares India Quality ETF here, and the Global X India Nifty 50 ETF here. Before investing in any ETFs, you should consult the respective product’s Product Disclosure Statement, which will be available on the fund’s website.