Investing in the digital boom in India with KEMX

AA branch of Reliance Industries has announced a partnership with the American company Sanmina, an electronics manufacturer, to build an electronics manufacturing center in India. Reliance said it is committing up to $220 million to the joint venture as it seeks to capture the meteoric growth of digital consumption in India, Forbes reported.

The digital economy in India is currently growing at 50% per year and is expected to reach $1 trillion due to the increasing availability of internet in the country and the consumption of digital content. The deal aims to bring high-tech manufacturing opportunities to India as the country seeks to be more self-sufficient in cloud services, 5G, IT, data centers, new energy, and more.

“Through this partnership, we expect to drive innovation and talent in India, meeting both Indian and global demand,” said Akash Ambani, Director of Reliance Jio, the technology unit of Reliance Industries.

Reliance is expected to hold a 50.1% stake in the business in a deal expected to close by September 2022.

Focus on emerging markets

For investors looking to capture the innovation and growth of large and mid-cap companies in emerging markets like India, but who already have a separate allocation to China or are looking to avoid exposure to China, the KraneShares MSCI Emerging Markets ex-China Index ETF (KEMX) is a good solution.

KEMX seeks to track the MSCI Emerging Markets ex-China Index, a free float-adjusted, market capitalization-weighted index that includes large and mid capitalization companies from emerging markets, excluding Chinese issuers. Contained titles are in the top 85% of their emerging market.

To determine the country of a security, where it is incorporated and where it is listed are considered first. For securities that have a primary listing outside the country in which they are incorporated, all secondary listings, geographic location of shareholders and operations, location of head office, history and country that investors associate with the sender are all taken into account.

Reliance Industries has a weighting of 2.03% in the fund.

KEMX has an expense ratio of 0.23%, with fee waivers expiring August 1, 2022.

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