22 Jan 2021
22 Jan 2021
22 Jan 2021
19 Jan 2021
DocumentsMCB India Sovereign Bond Fund Brochure | PDF 1MB MCBISBF KIID | PDF 294KB MCBISBETF Factsheet | PDF 168KB India Sovereign Bond ETF - Prospectus | PDF 824KB Zyfin India Sovereign Bond Liquid Index | PDF 437KB ISBETF Notice of Dividend | PDF 65KB MCBISBETF Annual Report June 2020 | PDF 397KB MCBISBETF Communique Sep 2020 | PDF 606KB MCBISBETF Communique | PDF 614KB MCBISBETF Interim Report 30.09.20 | PDF 751KB MCBISBETF Board Charter | PDF 380KB India Sovereign Bond ETF - Constitution | PDF 459KB
Investment grade statusIndia is an investment grade country (BBB- by S&P, Baa2 by Moody’s) and has not been downgraded for over a decade.
High GDP growthAccording to World Bank data, India is now the third largest economy in the world, the country’s nominal GDP having grown more than 11-fold from 1982 to 2017 to reach US$2.6 trillion. The IMF forecasts that India’s economy will grow by 7.5% annually between 2018 and 2021.
India’s sovereign debt market is also the third largest amongst Asian peers and is opening up further to foreign investors.
Favourable demographicsIndia ranks number 2 in the list of countries by population. Its population is equivalent to 17.74% of the total world population as per United Nation estimates, and growing at a rate of 1.1% per annum. India has a low dependency ratio and a growing young population has increasing access to education and the country’s middle-income class is growing, creating a need for new and better infrastructure, which will partly be financed through the debt market.
Attractive yieldsYields on India sovereign bonds remain attractive over the long-term in USD terms with an annualised return of 6.25% per annum achieved on 10-year bonds over the last 17 years (1999-2016) **.
** Source: S&P BSE India 10-year Sovereign Bond Index (USD)
- Looking to access the Indian sovereign bond market, thereby diversifying their fixed income portfolio
- Looking for regular returns in USD from coupon income and potential long-term gains from capital appreciation of the underlying bonds
- Having an investment horizon of at least 5 years
The bonds must:
- Have principal and interest denominated in INR
- Be fixed-coupon bonds with semi-annual coupon payment frequency
- Have an outstanding amount in issue of at least INR 50 billion
- Have traded for at least 50% of business days in the month
- Not be special bonds (such as Oil Bonds) issued by Indian Government
- Not be in FII Restriction (Negative Investment) list