Modi-backed ETF may fuel India sales after US$1.4bil haul

HONG KONG: The success of an exchange-traded fund (ETF) backed by Prime Minister Narendra Modi’s government may help boost the acceptance of such products in the world’s second-fastest growing ETF market.

Investors poured 92 billion rupees (US$1.4bil), or 3.7 times the targeted amount, into a fund of the top 10 state-run companies, according to Reliance Mutual Fund, which manages the pool. It was the third time in three years the government used the Central Public Sector Enterprises ETF, or CPSE, to raise assets. A first sale in March 2014 generated 43 billion rupees and a second tranche in January raised at least 45 billion rupees. Proceeds will be used to maintain public spending without increasing the fiscal deficit.