FLIN: Invest In The Newly Crowned Fourth-Largest Stock Market Via Its Lowest-Fee ETF

seekingalpha01-24

Following a stellar 2023, Indian stocks are off to a solid start in 2024.Valuations have also moved higher but remain well-supported by mid to long-term earnings growth.Ahead of a catalyst-rich Q1/Q2,...

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}\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nFLIN: Invest In The Newly Crowned Fourth-Largest Stock Market Via Its Lowest-Fee ETF\n</h2>\n\n<h4 class=\"meta\">\n\n\n2024-01-24 05:49 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://seekingalpha.com/article/4664488-flin-invest-in-the-newly-crowned-fourth-largest-stock-market-via-its-lowest-fee-etf><strong>seekingalpha</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>Following a stellar 2023, Indian stocks are off to a solid start in 2024.Valuations have also moved higher but remain well-supported by mid to long-term earnings growth.Ahead of a catalyst-rich Q1/Q2,...</p>\n\n<a href=\"https://seekingalpha.com/article/4664488-flin-invest-in-the-newly-crowned-fourth-largest-stock-market-via-its-lowest-fee-etf\">Source Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":"BK4588","symbol_name":"碎股","start_time":0,"source_url":"https://seekingalpha.com/article/4664488-flin-invest-in-the-newly-crowned-fourth-largest-stock-market-via-its-lowest-fee-etf","article_id":"2405486905","we_media_id":null,"thumbnails":[],"rights":null,"url":"https://stock-news.laohu8.com/highlight/detail?id=2405486905","pubTimestamp":1706046544,"sourceInfo":{"source_id":"seekingalpha","name":"Seeking Alpha"},"weMediaInfo":null,"summary":"Following a stellar 2023, Indian stocks are off to a solid start in 2024.Valuations have also moved higher but remain well-supported by mid to long-term earnings growth.Ahead of a catalyst-rich Q1/Q2,","collect":0,"end_time":0,"defaultTopTitle":"seekingalpha.com","property":[],"viewcount":null,"language":"en","relate_stocks":{"BK4588":"碎股","BK4550":"红杉资本持仓","LU0831103253.SGD":"JPMorgan Funds - Asia Pacific Income A (mth) SGD","IE00B3M56506.USD":"NEUBERGER BERMAN EMERGING MARKETS EQUITY \"A\" (USD) ACC","BK4134":"信息科技咨询与其它服务","INDA":"iShares MSCI印度ETF〈INDA〉","LU1267930656.SGD":"FRANKLIN INDIA \"AS\" (SGD) ACC A","LU0333810181.USD":"高盛印度股票组合Acc","LU0287143357.SGD":"Fidelity India Focus A-SGD","LU0536402901.SGD":"FTIF - Franklin India A (acc) SGD","LU0898667661.SGD":"JPMorgan Funds - Asia Pacific Income A (mth) SGD-H","LU0231203729.USD":"富兰克林印度基金A (acc)","LU1366334578.USD":"ALLSPRING EMERGING MARKETS EQUITY INCOME \"A\" (USD) INC","LU0708995666.HKD":"FRANKLIN INDIA \"A\" (HKD) ACC","BHRQY":"BHARTI AIRTEL LTD","IFN":"印度基金","LU0890818403.SGD":"JPMorgan Funds - Emerging Markets Dividend A (mth) SGD-H","INDY":"印度ETF-iShares","FLIN":"Franklin FTSE India ETF","LU0791591158.USD":"ALLSPRING  EMERGING MARKTES EQUITY INCOME \"I\" (USD) ACC","LU1102505762.USD":"富达新兴市场焦点 A","LU0791590937.USD":"ALLSPRING  EMERGING MARKTES EQUITY INCOME \"A\" (USD)","IIF":"IIF印度基金","FDN":"First Trust Dow Jones Internet I","LU1366334651.USD":"ALLSPRING EMERGING MARKETS EQUITY INCOME \"I\" (USD) INC","BK4585":"ETF&股票定投概念","BK4523":"印度概念","LU0862451753.SGD":"JPMorgan Funds - Emerging Markets Dividend A (mth) SGD","INFY":"印孚瑟斯","LU2265009873.SGD":"Eastspring Investments - Global Growth Equity AS SGD-H","BK4533":"AQR资本管理(全球第二大对冲基金)","LU1804176565.USD":"EASTSPRING INV GLOBAL GROWTH EQUITY \"A\" (USD) ACC","BK4535":"淡马锡持仓","LU0197229882.USD":"富达印度焦点基金"},"translate_title":"弗林：通过其最低费用的ETF投资于新加冕的第四大股票市场","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"BHRQY":1,"INFY":1,"INDY":1,"FDN":1,"FLIN":1,"INDA":1,"IFN":1,"IIF":1},"content_text":"Following a stellar 2023, Indian stocks are off to a solid start in 2024.Valuations have also moved higher but remain well-supported by mid to long-term earnings growth.Ahead of a catalyst-rich Q1/Q2, the lowest-fee Franklin FTSE India ETF is well-placed for more outperformance.   INDRANIL MUKHERJEE/AFP via Getty ImagesSince I last covered the ultra-low-fee Franklin FTSE India ETF (NYSEARCA:FLIN), it's been good news all the way for Indian stocks. This week saw the country hit yet another landmark – India is now the fourth-largest stock market in the world (by listed market capitalization), overtaking Hong Kong. BloombergWhile state elections are done and dusted, Indian general elections are still on the horizon, and this typically bodes well for markets - the last five election years have consistently seen solid market returns pre and post-event. This time is unlikely to be much different, in my view. Yes, the market has already rallied since state elections, likely pricing in a high probability of Prime Minster Modi winning a third term. CNBCThere's also a high likelihood we see more forced selling from foreign investors ahead of tighter disclosure rules (to be implemented next month). But the implications of a status quo scenario are perhaps underestimated – the country remains in the early stages of a multi-year capex cycle, while the multiplier effect of structural reforms (e.g., less bureaucracy, increased economic formalization, etc.) bodes well for overall growth. The current ~22x forward earnings (using MSCI India as a proxy) might seem demanding but isn't at all departed from fundamentals, particularly for the large-caps, which remain on track to deliver bottom-line growth of +25% this year and low to mid-teens through 2024/2025. With the lowest-cost FLIN also retaining plenty of exposure to potential election beneficiaries, I continue to like this fund heading into an interim budget and national election catalyst through Q1/Q2 this year. Data by YChartsFranklin FTSE India ETF Overview – Larger, More Liquid, and Still the Lowest Fee Vehicle The Franklin FTSE India ETF is an Indian large-cap tracker benchmarked against the FTSE India Capped Index, a capitalization-weighted index subject to the following concentration limits – 1) Less than 20% allocated to a single holding and 2) the sum of all +4.5% holdings should not cross the 48% threshold. In line with the index, FLIN's portfolio composition is reviewed and reconstituted on a semi-annual basis (March and September). Besides its weighting caps, the ETF stands out for its ultra-low 0.2% fee – a feature shared by most other Franklin international ETFs listed in the US and one that has sustained despite a significantly higher asset base post-Q4. By comparison, the largest US-listed large-cap Indian ETF, iShares' MSCI India ETF (INDA) (see coverage here), charges ~0.7%. The fee gap further widens relative to Nifty 50 trackers, like iShares' India 50 ETF (INDY) (see coverage here), which charges ~0.9%. Helped by its larger size and liquidity today, FLIN now offers some of the tightest spreads out there as well; while it still trails the best-in-class 2bps bid/ask spread offered by INDA (vs. 6bps for FLIN), it leads INDY's 12bps by a decent margin. Franklin TempletonAs a result of FLIN's weighting caps, the sector breakdown also remains more diversified than peers. The composition is broadly the same as last quarter, with Financials still leading the way at a slightly larger 23.0% post-Q4 rally. Information Technology remains in second place at 12.9% but has gained slightly after a robust quarter. Consumer Discretionary (broadly unchanged at 11.5%), Energy (slightly up to 10.9%), and Materials (the biggest mover at down 9.7%) round out the top five. While FLIN's sector concentration is high, it remains a few percentage points lower than key comparables INDY and INDA, both of which retain far less strict concentration limits. Franklin TempletonThe fund's single-stock portfolio has been expanded yet again to 214 names, though the number of holdings over the 5% threshold is now up to three. Major holdings (over 5%) include conglomerate Reliance Industries Limited (OTC:RLNIY) at a larger 8.0%, followed by HDFC Bank (up to 6.1%) and tech services company Infosys (INFY) (up to 5.1%). India's other tech services giant, Tata Consultancy Services (OTCPK:TTNQY), is up to 3.5%, while domestic banking group Axis Bank (OTC:AXBKY) drops out of the top five following a year-to-date correction. In its place is telecommunications services company Bharti Airtel (OTCPK:BHRQY), up to 2.3% after an impressive stock price rally in recent months. Like its sector profile, FLIN differentiates itself not so much by composition but by diversification, as its stricter weighting caps and broader portfolio keep the fund better spread out vs its large-cap comparables. Franklin TempletonFranklin FTSE India ETF Performance – Ending 2023 on a High; Off to a Good 2024 Start After a strong Q4 rally following a market-friendly state election outcome, FLIN ended last year +20.7% higher (+20.6% in market price terms). The fund kicked off 2024 with more of the same and is currently up low-single-digits year-to-date in NAV and market price terms. On a relative basis, this puts FLIN at the top of the large-cap India ETF pile - its higher fee/less diversified peers INDA and INDY trailed by around three percentage points at +17.5% and +17.1%, respectively, in 2023. Over longer three and five-year timelines, FLIN has annualized at a similarly impressive +11.4% and +10.8%, respectively – also ahead of its large-cap comparables. The catch is FLIN's wide tracking error (including currency and capital gains tax impacts, among others), a key tradeoff to its ultra-low fee structure. In last year's bull market, the fund saw the gap to its benchmark FTSE India Capped Index widen to over four percentage points – well above the three to four percentage points for the higher-fee iShares India large-cap funds. The gap narrows during down years, though, so since inception, FLIN has still kept its tracking error within two percentage points of the FTSE India Capped Index. Franklin TempletonThe other downside is the lack of income – last year's $0.26/share distribution amounts to another year of sub-1% yields and probably won't materially increase anytime soon. Active alternatives like the abrdn-managed India Fund (IFN) (see coverage here) and Morgan Stanley's India Investment Fund (IIF) (see coverage here) regularly pay out their gains to investors and, therefore, offer far better income alternatives. Growth-oriented investors, on the other hand, who don't mind paying up for FLIN's mix of quality and capital growth should continue to find a lot to like here. MorningstarInvest in the Newly Crowned Fourth-Largest Stock Market via its Lowest-Fee ETF  Owning Indian stocks into national election season (due in April/May this year) has historically yielded positive outcomes for investors. Yes, a market-friendly policy continuity scenario has likely been priced in at this point, as reflected in the Indian stock rally through year-end and this year. Listed Indian stocks are also now the fourth-largest market in the world, displacing the troubled Hong Kong market earlier this week. But valuations aren't all that stretched relative to fundamentals – 2023 EPS growth has more than matched valuations at +25%, while the low to mid-teens earnings bar into 2024/2025 seems well within reach as well. Yardeni Investors who favor low fees will find a lot to like in FLIN - not only the lowest fee Indian ETF listed in the US but also among the more diversified large-cap options due to its weighting caps. The portfolio also retains exposure to potential election and interim budget beneficiaries, both positive Q1/Q2 catalysts, leaving FLIN well-placed for the year ahead.","kind":null,"is_publish_news":null,"is_publish_highlight":null,"is_publish_live":null,"is_publish_wemedia":null,"editions":null,"symbols":[],"gpt_button":1},"commentList":[],"isCommentEnd":true,"newsSizeData":{"likeSize":0,"commentSize":0,"repostSize":0,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false},"APP":{"userAgent":"Mozilla/5.0 AppleWebKit/537.36 (KHTML, like Gecko; compatible; ClaudeBot/1.0; +claudebot@anthropic.com)","isDev":false,"isTTM":true,"deviceId":"web-server-community-laohu8-v3","version":"4.22.4","shortVersion":"4.22.4","platform":"web","vendor":"web","appName":"ttm","isIOS":false,"isAndroid":false,"isTiger":false,"isTHS":false,"isWeiXin":false,"isWeiXinMini":false,"isWeiBo":false,"isQQ":false,"isBaiduSwan":false,"isBaiduBox":false,"isDingTalk":false,"isToutiao":false,"isOnePlus":false,"isHuaWei":false,"isXiaomi":false,"isXiaomiWebView":false,"isOppo":false,"isVivo":false,"isSamsung":false,"isMobile":false},"href":"/m/news/2405486905"}