Have you ever considered investing in India through an ETF? Let’s explore NFTY, an ETF composed of the 50 largest companies in India that together represent 66% of the weight of the India Stock Exchange.
Key ETF Details
- Rebalanced every 4 months
- Previously known as First Trust Taiwan AlphaDex Fund (FTW) in 2018
DISCLAIMER
Nothing I write here constitutes investment advice or a call to buy or sell. Draw your own conclusions and see what’s best for you. Past performance does not guarantee future results. Take care of your money, because no one else will do it for you.
Quantitative Analysis
The fund has shown excellent performance over the years, but let’s examine the most relevant data points that caught my attention:
Financial Metrics
- Price-to-Book Ratio: 3.35 (categorized as overvalued)
- Assets Under Management: $217 million (ensuring solid ETF investments)
- Daily Trading Volume: $167,000 (below my ideal threshold of $250,000)
- This raises concerns about liquidity
- Last Dividend: 1.25% or $0.66
- While I don’t focus on dividends, some investors consider this important
Qualitative Analysis
Looking beyond the numbers, we can reflect on India’s isolated growth. While I’ve never visited the country, my perspective comes from internet research and analysis. Here are the key highlights:
India’s Growth Drivers
- GDP Growth: India has one of the highest GDP growth rates globally
- Technology Powerhouse: Not through tech labs, but via widespread internet access and usage across the population
- English Language Advantage: As a former British colony, English is widely spoken, facilitating:
- Technological advancement
- Research capabilities
- Tourism development
- Massive Population: Over 1 billion people
- While the majority faces economic challenges, there’s significant potential to build a better India
Technical Analysis
NFTY is currently falling and approaching the 200-period moving average. If it breaks below and confirms this level, we could consider taking a long position. However, caution is advised at this moment.
Summary: NFTY India ETF
Research Limitations
After extensive research, limited relevant information is available about NFTY across major platforms:
- Yahoo Finance
- Google Finance
- Morningstar
- Finviz
Despite the data scarcity, I wanted to present this analysis so we can evaluate calmly and recognize the many investment options available.
My Assessment
My honest opinion: I currently see no competitive advantage in NFTY. The data does not favor a purchase; rather, it points toward a sell signal. However, to sell, one would need to have been invested for several years already.
Investment Perspective
- I view this more as capital diversification than a true investment opportunity
- My rating: 5/10
- Strategic note: If a crisis occurs in India tomorrow, you’ll know which instrument to use for short-term trading
This analysis is for educational purposes only. Always conduct your own research and consult with financial professionals before making investment decisions.