Mauritius Commercial Bank to launch ETF for Indian government securities

MUMBAI: Mauritius Commercial Bank is ready to introduce the world’s first exchange traded fund to provide global investors access to the Indian government bond market.

The scheme, christened MCB India Sovereign Bond ETF, will be listed on the stock exchange of Mauritius. “India has a strong role to play in global asset allocations,” Sanjay Sachdev, chairman, Zyfin Research, told ET. Zyfin will advise the fund on India investment.

“For the first time, overseas retail investors (in Mauritius) will get an opportunity to invest in Indian G-Secs via an exchange traded fund,” he said. “MCB is the largest bank there. They are running the fund (under MCB Investment Management) while we are advising them on investment.”

An investor can subscribe to the ETF at $10/share through MCB stockbrokers. The minimum initial investment is $5,000, and the offer would be closed for subscription on May 27. After the initial period offer, you can buy ETF shares on the Stock Exchange of Mauritius at market prices.

The scheme aims to provide investors with regular short-term returns through the payment of half-yearly dividends and longer-term capital appreciation following the ZyFin India Sovereign Bond Liquid Index which tracks the performance of the most liquid and fixed rate central government bonds in India, the company said.