Peter Kohli, CEO of DMS Funds, always felt that without access to single country index funds, his clients were missing out on great investment opportunities in the developing world.
Passive, benchmarked index funds in liquid and well-regulated markets with sound investor protections in place were the way to go. These kinds of structures offer long-term investment potential against the backdrop of the themes common to the growth of emerging and frontier markets.
Kohli, who was born and raised in India, felt that India was the best place to begin. “India is a major economy and it is politically stable, which is very important to me. India has great long-term potential and that fits in well with our long-term investment philosophy. Our biggest investment theme is the consumer economy — a middle class that is expanding and looking for goods to buy. India is a perfect example of that: The middle class is expanding hugely now and many more people have money to burn,” he said.
Based on that premise, Kohli teamed up with the NASDAQ to offer two India funds, the DMS NASDAQ India Bank Index Fund and the DMS NASDAQ Mid-Cap Index Fund. The former is based on the NASDAQ India Mid-Cap Sector Capped 20 Index, which comprises midcap stocks with no individual sector exposure exceeding 20%.
These companies represent a broad spectrum of rapidly growing industries essential to India’s continued economic growth, Kohli said, and serve as a benchmark for the midcap portion of Indian stocks.
The DMS NASDAQ India Bank Index Fund is based on the NASDAQ India Banks Index, which comprises the largest banks listed on Indian exchanges and serves as a benchmark for the capital market performance of India’s banking sector, which Kohli is very bullish on.