Indxx goes for global domination in innovative launches
Indxx is the index provider behind the recent launch of the South Korea based ETF issuer Mirae Asset Global Investments’ TIGER US Tech Top 10 INDXX ETF (Ticker: 381170 KS Equity), a launch that has been one of the most successful launches in South Korea so far, with its USD13 million in seed money sold out in one and a half hours.
Indxx has indexes and other solutions tied to USD19 billion in assets (as of 15 April, 2021) and Rahul Sen Sharma (pictured), Managing Partner at Indxx, explains that the firm’s main offices are in India, New York, and Miami. “We are a full-service index provider doing everything you would expect from a larger index provider,” Sen Sharma says.
“We have our own in-house product development team coming up internally with interesting concepts on a global basis, such as our 5G technology index, or indices based on Green Infrastructure, SPACs, Robotics or Artificial Intelligence.”
“Our USP is that there are well known index providers on one side that charge a lot of money and are a bit slower in terms of building indexes and on the other side low-cost index providers that turn them out at low cost but we are in the middle, building high quality indexes and charging a price in the middle between the two as we believe quality should be charged for at a commensurate rate.”
Indxx started in 2005 as an equity research business doing macro-economic and equity research and in 2008 it started in the index world, at a time when people were moving away from active to passive.
“It’s good for the markets from an investor perspective because if they want to access a theme such as 5G, it can be hard for a retail investor to do that. How can they get exposure on a global basis effectively and cost efficiently?”
Sen Sharma explains that the research team goes company by company in certain themes, looking at where the majority of the revenue is, or business focus, remaining agnostic about whether or not it has the potential to increase or decrease in value.
“We just need the best exposure possible,” he explains, “it democratises the investment process”.
Indxx has worked with Mirae and its affiliates around the world for a number of years, having launched a number of products tracking its indices including recently a Fintech ETF in South Korea, a cloud computing ETF in Australia and a Japan E-Commerce ETF in Japan. “In the case of our Indxx US Tech Top 10 Index, they wanted a simple index-based wrapper solution allowing South Korean investors to access the top 10 US technology companies,” he explains.
“It’s a unique and novel idea but we see a lot of novel ideas and you never know whether something will succeed or not but we saw the Amazons, Facebooks and Netflixes but also Nvidia, Tesla and PayPal that are powering the fifth wave of industrial technological innovation in the world,” he says. “In terms of human history these are the companies that are most powerful today, whereas before it was energy and before that steel.”
Other recent and innovative products have included Direxion’s Hydrogen Economy index, which has turned out to be the largest one in the sector so far, raising USD30 million (as of April 15, 2021) and the end of this quarter will see more products based on health care and more on US technology.
Indxx is already behind the HAN-GINS health care innovation ETF, recently updated to become the HAN-GINS Indxx Healthcare Megatrend Equal Weight UCITS ETF (WELL). The firm is pushing ‘aggressively’ into the European market with more thematic launches on the cards.
“The European market is different from the US market as it is ahead in ESG, but a little bit behind in terms of innovative thematic products,” Sen Sharma says. Asia is also keeping them busy, with new launches and new innovation coming in South Korea, Taiwan and Hong Kong.