India’s economy is of global importance.

India has a large, young population and an open and democratic political system. India is Asia’s third-largest economy and differs in notable ways from other markets, emerging and developed alike. We see considerable untapped potential – with more than 16 per cent of the world’s population, India produces only seven per cent of the world’s output.

The drivers of growth in India are deeply structural, which suggests they are sustainable and likely to keep the economy on a reasonably strong upward path. These include urbanisation of the world’s largest rural population, gradual movement from an informal economy (currently comprising 90 per cent of India’s workers) to a formal economy, young demographic with a mean age of 27, considerable investment in infrastructure, and an ambitious program to upskill 400 million Indians. [1]

India’s relative valuations to emerging markets are attractive and forward earnings growth looks more attractive than it has been in a while. Relative policy uncertainty seems low and return correlations continue to trend lower, underscoring India’s defensive nature in a tough global environment.

India is undergoing irreversible transformation, though the progress is likely to fluctuate due to structural shifts and technological and environmental disruptions. Therefore a long term view is important for building a sustainable strategy and grasping the opportunities created by a growing economy.

Read Peter N. Varghese’s report, ‘An India Economic Strategy to 2035’ >

 

[1] Executive Summary & Overview – An India Economic Strategy to 2035

 


Morgan Stanley Research

Triggers in place for Growth Revival

India’s growth may have troughed in the quarter gone by. With the government and the RBI acting in concert to improve liquidity and lower rates, save for a big global growth slowdown, India could be on a path for a growth recovery and relative outperformance.

ASSET ALLOCATION UPDATE >
Alexandre Ventelon, Executive Director, Asset Allocation Strategist

 

For more on India’s economy and the investment potential, speak to your Morgan Stanley financial adviser.


Potential Implementation Ideas

ASX Listed ETF | BetaShares India Quality ETF (Ticker: IIND)

The ETF provides investors with a passive exposure to a diversified portfolio of quality Indian companies with high profitability, low leverage and high earnings stability. The Fund aims to track the performance of an index (before fees and expenses) that comprises 30 Indian companies ranked by highest quality score.

 

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Factsheet Flyer Brochure Presentation (Louis Crous)

Offshore ETF | iShares MSCI India UCITS ETF USD (Ticker:NDIA LN)

The ETF seeks to track the investment results of an index composed of Indian equities. It provides direct passive exposure to large- and mid-cap stocks covering approximately 85% of the Indian stock market.

 

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Factsheet
   

Australia Managed Fund | Ellerston India Fund

The Fund is an actively managed, concentrated portfolio of high quality Indian growth companies

  • The portfolio comprises 20-50 Indian companies with long term sustainable growth profiles. Key highlights include:

  • Managed by team of dedicated Asia and India specialists who have diverse sector and geographic expertise

  • Distinctive high growth, high conviction, benchmark independent approach

  • Blends macro insights with investable long-term themes and company analysis within a highly disciplined, repeatable investment process

 

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Factsheet Presentation (Mary Manning) Presentation (Ashok Jacob)

Offshore Mutual Fund | Pinebridge India Fund

The Fund aims to provide long-term capital appreciation by investing in equity and equity-related securities of companies listed on stock exchanges in India or closely related to the economic development and growth of India. Key highlights include:

  • Access to compelling investment opportunities through a portfolio of companies listed on stock exchanges in India or closely related to the economic development and growth of India

  • Time tested investment process which has been in existence for over 15 years; and

  • Integration and close collaboration between the fund’s on-the-ground dedicated team and other investment professionals within the firm globally

  • Actively managed

 

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Factsheet Monthly commentary