ZyFin Holdings, which sells India-based ETFs to foreign investors, and the capital markets arm of Mauritius Commercial Bank, are launching an MCB India Sovereign Bond ETF, the first such to provide international investors access to the Indian sovereign bond market through an exchange-traded fund.

$650-b worth issuances The main objective of the MCB India ETF is to facilitate investment in the Indian sovereign bond market, “an asset class which has traditionally been difficult for foreign investors to access because of minimum investment thresholds, ceilings on foreign holdings and other regulatory processes,” a press release said.

India’s sovereign bond market is one of the world’s largest and most attractive with outstanding issuances in excess of $650 billion.

The MCB India ETF will replicate the ZyFin India Sovereign Bond Liquid Index, which tracks the performance of the most liquid, fixed rate, rupee-denominated bond issued by the Indian government, the note added.

The MCB India ETF will be a global open-ended collective investment scheme domiciled in Mauritius and listed on the Mauritius SE. “It will invest in the most liquid sovereign bonds with a typical maturity period spanning 8-13 years. It will provide investors with regular short-term returns through payment of dividends in dollars and has the potential for capital appreciation,” the note added.

Investment advisor MCB Capital Markets is the sponsor and promoter of the MCB India ETF and has appointed ZyFin as investment advisor. The offer period of the fund will close on May 27 and the MCB India ETF will start trading on June 6.

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