European Asset Manager Amundi Expands into Indian Debt Market

MUMBAI — European asset manager Amundi is making a significant push into the Indian debt market with the launch of two new funds, catering to the growing demand for Indian fixed-income products. The fund house, which is Europe's largest asset management firm, aims to increase its exposure to Indian debt by offering a diversified range of investment options to its clients.

Amundi's recent fund launches include a dollar-denominated exchange-traded fund (ETF) and a rupee-denominated India Bond Fund. The ETF, launched in September, tracks the bonds under the Fully Accessible Route (FAR), while the India Bond Fund offers a more diversified investment horizon, including state bonds and corporate bonds, in addition to traditional government securities.

The India Bond Fund, an unconstrained product, provides investors with the flexibility to invest in a broader range of Indian debt securities. Rajiv Nihalani, senior emerging markets investment specialist at Amundi, highlighted the fund's unique features: "The product is an unconstrained product ... so it provides quite a lot of flexibility to invest into state bonds as well as corporate bonds along with the traditional government securities."

With a targeted average duration of seven to eight years, the India Bond Fund aims to capitalize on potential monetary policy easing in the first half of 2025. Foreign investors have been increasingly attracted to the Indian bond market, with over $17 billion flowing in since September 2023. However, recent net sales of around 80 billion rupees ($947 million) have been observed, highlighting the need for a balanced investment approach.



Amundi's strategic launch of these funds comes at an opportune time, as India's growth potential and attractive yields draw investors to its fixed income market. The fund manager plans to approach institutional investors in Europe and Asia initially, before expanding to Latin America by the end of the year.

The Indian bond market offers a compelling investment case, driven by factors such as the country's strong demographics, urbanization, and economic growth. Amundi's fund launches cater to the diverse needs of investors, with the ETF targeting long-term growth and the India Bond Fund offering broader exposure to the Indian fixed income market.



In conclusion, Amundi's recent fund launches targeting the Indian bond market reflect the growing interest in the country's fixed income products. By offering a diversified range of investment options, Amundi caters to investors seeking exposure to the Indian bond market while managing risks associated with market volatility. As India's growth story continues to unfold, the country's bond market is poised to attract more international investors, driving growth and liquidity in the fixed income space.