Another Option to Invest in India – INP

Barclay’s iPath MSCI India Index ETN (Exchange Traded Note) – INP (details here) is the newest way to invest in the Indian Stock market. INP is traded like a regular stock and tracks the MSCI India Index. It pays no dividends, just tracks the index.

The MSCI India Index is currently comprised of the top 68 companies by market capitalization listed on the National Stock Exchange of India (NSE). As far as I can tell the index is designed to include both the price gains and income from dividends. So even though INP does not pay out dividends, they are included in the price gain. This seems to be a very tax efficient way of investing. I’m thinking of opening a position in INP beginning of next year. Forbes did not paint a good picture for India here, but I am committed to investing in India for the long term.

The India Fund Inc. (IFN) recently announced a dividend of $3.46/share taking the total dividend for 2006 to $5.12!! Even though the IFN price did not recover to its all time high (The Indian indices did recover to record levels), the 11% dividend and the about 15% price gain made it a great investment for 2006. It has been a volatile but worthwhile holding since I first bought IFN in 2003.

Happy New Year and wishing you great returns in 2007!

2 thoughts on “Another Option to Invest in India – INP

  1. David Hepworth says:

    I had not realized the tax efficiency of the ETF with respect to dividends. That is very important for some advisory clients. Thank you for pointing it out.

Leave a Reply

%d bloggers like this: