Already one of the fastest-expanding economies in the world, India is expected to experience transformation and continued long-term growth.
Seen to catalyze a rise in various sectors of the Indian economy and accelerate long-term corporate earnings are groundbreaking structural reforms from Prime Minister Narendra Modi’s administration. These include a pay raise for government workers, projected to help boost consumption; interest rate cuts by the Reserve Bank of India to foster a favorable lending environment; and a new goods and services tax that should lead to increased infrastructure spending from government and push GDP growth past 8%.
Recent macroeconomic indicators also support a positive outlook. From around 6.9% in 2013-2014, GDP growth has accelerated to 7.6%. Inflation has come down, and foreign exchange reserves have reached record levels. All these have made the country a top investment destination among pension funds, endowments, and multinational corporations.
Indian sovereign bonds have likewise been very attractive, with the 10-year bond yield at around 6.7%. This compares favorably to US 10-year bonds, with a yield below 2.5%, and Canadian 10-year bonds, with a yield below 1.5%. On the equities side, Indian equities have risen since February, officially entering a bull market in July. The BSE Sensex Index posted a 22% return from February through to the end of September, while 66% of companies listed in the NSE Nifty 50 Index beat or matched earnings estimates in the quarter ending June 2016.
Canadian investors who want direct access to this promising emerging market can do so through Excel Funds’ India fund offerings. The Excel India Fund, sub-advised by leading Indian fund manager Birla Sun Life Asset Management Company Limited in Mumbai, is Canada’s largest and longest-running India-focused mutual fund. Investors who want supplementary exposure to Indian bonds can avail of the Excel India Balanced Fund, while those looking to access small- and mid-cap firms can do so through the Excel New India Leaders Fund.
Excel Funds announces discount series
What does the passage of India’s GST bill mean for ETFs?