Amundi MSCI India ETF Acc EUR | INR |
Morningstar's Take
|02/07/2024by Madeleine Black
| We have qualitatively reviewed this strategy and reaffirmed its Process and People ratings. The following text is from July 19, 2023. Lyxor MSCI India—now part of the Amundi exchange-traded fund lineup—has a large- and mega-cap bias that renders it an imperfect tool to access the broader India equity market. This focus leaves investors exposed to significant single-stock concentration risks and leaves ample room across the market-cap spectrum for active managers to add value. The fund tracks the performance of the market-cap-weighted MSCI India Net Return Index, which covers 85% of the total Indian equity market by size. By number, however, the fund tracks around 100 of the 4,000 listed Indian equities available across domestic exchanges, meaning that the fund fails to adequately capture much of the opportunity set. Accordingly, active managers who are willing to screen for quality and allocate further down the market-cap spectrum are left with a long tail of mid- and small-cap companies, which they have historically used to add value. Small- and mid-cap companies have traditionally fetched strong return premiums over their mega- and large-cap peers. They typically post strong returns during market rallies, which support long-term performance figures through periods of market stress; managers who have allocated to these parts of the market have been rewarded over market cycles. When it comes to fees, this fund has a reasonably low KIID ongoing charge of 0.85%, marking it cost-effective in relation to its active counterparts. The category's median fee level stands higher at 1.85%. However, it's worth noting that this fund is the most expensive passive fund within its category. More affordable alternatives exist with fees ranging from 0.19% to 0.80%. This is not to say that there are no positives to passive funds. For example, they are valid instruments for cash equitization to cover gaps in allocation in a portfolio while transitioning between active managers. But overall, this remains a market where active managers have consistently shown that they can add value over standard index propositions. |
Mega- and large-cap exposure to Indian equities.To find out how Morningstar rates a fund click here.
| Morningstar Pillars | |
| People | Above Average |
| Parent | Average |
| Process | Below Average |
Morningstar Medalist RatingMorningstar assigns the Medalist Rating to funds that are qualitatively and quantitatively assessed through manager research and algorithmic processes. The assessment turns on three key “pillars” – People, Process, and Parent – that yield an estimate of how well a fund will perform before fees but after adjusting for risk.
