Amit Anand is the co-founder of INDF, Nifty India Financials ETF. INDF tracks the Nifty Financial Services 25/50 Index which reflects the performance of Indian banks, financial institutions, housing finance, insurance, and other financial services companies.
We interviewed Amit about his new venture, India’s economy broadly and how Family Offices inspired a historical moment at the New York Stock Exchange. Here is a snippet from the interview where Amit discusses current trends within Family Offices.
There are two trends that are very obvious to me. One is in terms of where people want to invest and what I am finding out is as there are generational shifts, there is a huge focus towards ESG and it is where impact investing really plays in to peoples investments in where to allocate capital.
ESG can be something obvious like renewable energy but it can also be something that is qualitative like: is the Board of Directors of the company you are investing in diverse or, is the company you are investing in; which is very relevant in the Emerging Markets right now, doing something that promotes people rising through classes?
ESG as a trend is really relevant now more than ever before and that’s showing up in new areas such as value-stocks. As cheap as certain equities in traditional fossil fuels may be, they really are not worth owning at all because they don’t follow the trend of where the future is going.
Another trend that is really interesting and interrupting other conversations at the moment is taxation. A huge deal of uncertainty currently exists around the future of capital gains tax, inheritance tax especially here in the US and I think Family Offices are really asking that if you are pitching me a long-term investment that is going to compound my money for the next 15-20 years why should it not be the most tax-efficient investment possible?
Structure is a big factor here and a lot of people don’t know this, but ETF are tax-advantaged in the sense that whereas for a lot of mutual funds, when you create or redeem your investment in a mutual fund, the mutual fund is forced to buy or sell shares which always causes a tax event for remaining investors in that mutual fund and so all of us at a mutual fund at the end of the year get a capital gains bill that we have to pay. ETFs benefit from superior tax regulation where when an ETF buys or sells shares and is redeemed or created, it can do so in kind. So, instead of selling shares and giving cash to a counterparty it can give shares to a counterparty or receive shares from a counterparty to create ETF unit. It means very few ETFs give you a capital gains bill at the end of the year if you don’t transact in that ETF and think that is really interesting as there is a heightened focus on taxation.
Keep an eye on our LinkedIn feed to read Amit’s outlook on India becoming the 2nd largest addressable economy, portfolio diversification as a result of COVID-19 and of course, INDF and that historical moment at the NYSE.