As India’s rapid digitization potentially creates significant economic value and transforms India’s capital markets, DGIN provides targeted exposure to companies driving India’s digital future.
“India is in the midst of a massive shift, driven in large part by the rapid digitization of the country’s economy,” said Angus Shillington, Deputy Portfolio Manager for VanEck’s active Emerging Markets Equity Strategy. “India’s population includes the largest ‘Gen Z’ of any country and a rising middle class. Due to these demographics, along with low data costs, increasing smartphone penetration and government policies designed to transform India into a digitally empowered society, the digitization of India is a key theme for investors looking for emerging growth opportunities.”
Out of India’s population of 1.4 billion people, 622 million are active internet users, with that number potentially rising to 900 million by 2025, bringing new consumption behavior and alternatives to traditional spending, banking and shopping.1
Another major driver of this digital economy is the growing number of “unicorns2” going public in India in recent years, enabled by the rise of a robust internet ecosystem, increased availability of private capital and a favorable regulatory environment. India has had 83 unicorns come to market with a total valuation of $277.77B as of mid-January 2022. Furthermore, the country’s robust IPO pipeline has 250 companies currently valued at over $100M, respectively, and 100 additional new unicorns poised to enter the market by 2025.3
“Zomato, one of the biggest names to recently come out of India’s IPO pipeline, is an excellent example of how digitization is creating new opportunities and revolutionizing consumer habits—in this case within food delivery,” added William Sokol, Director of Product Management at VanEck. “Digitization is taking place across all sectors of the Indian economy, within core digital sectors like IT services, telecom and software/hardware, as well as emerging themes and sectors like e-commerce, online brokerages and internet applications. DGIN offers targeted exposure to these trends, and we’re pleased to be bringing this Fund to market.”
DGIN seeks to track as closely as possible the price and yield of the MVIS Digital India Index (MVDINDTR), a rules-based index offering pure-play exposure to companies involved in supporting the digitization of the Indian economy. Companies eligible for inclusion in the index must be domiciled, headquartered or incorporated in India and have a market cap exceeding $150M daily trading value, and be “pure play,” meaning at least 50% of their revenues are derived from one or more of the following categories: software, hardware, information technology services and consulting, communications equipment and infrastructure, telecommunications infrastructure, telecommunication services, internet applications, e-commerce including online financial services and electronic payment processing.
In addition, Indian companies that are ranked within the top 10 telecommunication services companies by annual revenue are also eligible for inclusion in the index.
“DGIN was informed by our active emerging markets Investment Team, and exemplifies the extensive emerging markets experience we bring to our active and passive strategies,” said Ed Lopez, Head of Product Management at VanEck. “We are seeing increasing interest in emerging markets from clients, and we have an established track record of providing targeted exposure to key emerging markets and related themes.”
DGIN joins an emerging markets equity lineup that includes the VanEck Emerging Markets Fund, VanEck Vietnam ETF (VNM) and VanEck India Growth Leaders ETF (GLIN). GLIN provides broad exposure to Indian companies with attractive growth potential at a reasonable price. VanEck is also expecting to launch a broad-based Emerging Markets Leaders Strategy at the end of the month.
DGIN is listed on the NYSE Arca and has a net expense ratio of 0.75%.
VanEck has a history of looking beyond the financial markets to identify trends that are likely to create impactful investment opportunities. We were one of the first U.S. asset managers to offer investors access to international markets. This set the tone for the firm’s drive to identify asset classes and trends – including gold investing in 1968, emerging markets in 1993, and exchange traded funds in 2006 – that subsequently shaped the investment management industry.
Today, VanEck offers active and passive strategies with compelling exposures supported by well-designed investment processes. As of January 31, 2022, VanEck managed approximately $78.6 billion in assets, including mutual funds, ETFs and institutional accounts. The firm’s capabilities range from core investment opportunities to more specialized exposures to enhance portfolio diversification. Our actively managed strategies are fueled by in-depth, bottom-up research and security selection from portfolio managers with direct experience in the sectors and regions in which they invest. Investability, liquidity, diversity, and transparency are key to the experienced decision-making around market and index selection underlying VanEck’s passive strategies.
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Not intended as a recommendation to buy or to sell any of the securities mentioned herein. Holdings will vary for the Funds and their corresponding Indices.
An investment in the VanEck Digital India ETF (DGIN) may be subject to risks which include, among others, special risk considerations of investing in Indian issuers, equity securities, small- and medium-capitalization companies, communication services and information technology sectors, emerging market issuers, foreign securities, foreign currency, cash transactions, market, operational, index tracking, authorized participant concentration, new fund, absence of prior active market, trading issues, passive management, fund shares trading, premium/discount and liquidity of fund shares, non-diversified and concentration risks.
You can lose money by investing in the VanEck Emerging Markets Fund. Any investment in the Fund should be part of an overall investment program, not a complete program. The Fund is subject to the risks associated with its investments in Chinese issuers, direct investments, emerging market securities which tends to be more volatile and less liquid than securities traded in developed countries, foreign currency transactions, foreign securities, communication services sectors, consumer discretionary sector, financial services sector, information technology sector, other investment companies, Stock Connect, management, market, operational, restricted securities, sectors, small- and medium-capitalization companies risks and special purpose acquisition companies. The Fund’s investments in foreign securities involve risks related to adverse political and economic developments unique to a country or a region, currency fluctuations or controls, and the possibility of arbitrary action by foreign governments, or political, economic or social instability.
An investment in the VanEck Vietnam ETF (VNM) may be subject to risks which include, among others, investing in Vietnamese issuers, foreign securities, frontier market issuers, foreign currency, depositary receipts, , consumer staples sector, financials sector, consumer discretionary sector, information technology sector, real estate sector, small- and medium-capitalization companies, cash transactions, equity securities, market, operational, index tracking, authorized participant concentration, no guarantee of active trading market, trading issues, passive management, fund shares trading, premium/discount risk and liquidity of fund shares, issuer-specific changes, non-diversified and concentration risks, all of which may adversely affect the Fund. Foreign and frontier markets investments are subject to risks, which include changes in economic and political conditions, changes in foreign regulations, changes in currency exchange rates, unstable governments, restrictions of foreign ownership, and limited trading capacity which may make these investments volatile in price or difficult to trade. Small- and medium-capitalization companies may be subject to elevated risks.
An investment in the VanEck India Growth Leaders ETF (GLIN) may be subject to risks which include, among others, investing in Indian issuers, foreign securities, emerging market issuers, foreign currency, depositary receipts, consumer staples sector, health care sector, financials sector, information technology sector, small- and medium capitalization companies, cash transactions, equity securities, market, high portfolio turnover, operational, index tracking, authorized participant concentration, no guarantee of active trading market, trading issues, passive management, fund shares trading, premium/discount risk and liquidity of fund shares and concentration risks, all of which may adversely affect the Fund. Foreign and emerging markets investments are subject to risks, which include changes in economic and political conditions, foreign currency fluctuations, changes in foreign regulations, changes in currency exchange rates, unstable governments, and limited trading capacity which may make these investments volatile in price or difficult to trade. Small- and medium capitalization companies may be subject to elevated risks.
Investing involves substantial risk and high volatility, including possible loss of principal. An investor should consider the investment objective, risks, charges and expenses of a Fund carefully before investing. To obtain a prospectus and summary prospectus, which contain this and other information, call 800.826.2333 or visit vaneck.com. Please read the prospectus and summary prospectus carefully before investing.
1 Kantar report “Internet Adoption in India”.
2 Unicorns is a term used to describe a privately held startup company with a value of over $1 billion.
3 Investcorp “Digital India: The $1 trillion Opportunity”, Goldman Sachs “India Equites: Digital transformation as private goes public”. Investindia.gov.in
Chris Sullivan/Julia Stoll