Is It Time to Wade Back into India ETFs?

Despite the slow economic growth witnessed in India, it’s still far better than what most developed countries are experiencing. This makes the ETFs appealing for investors who want exposure to the growing country.

India remains an attractive investment location despite slow economic growth this year. Factors such as capital flows, domestic demand, portfolio flows and a strong savings rate have India in a good position to continue moving forward, reports Abhrajit Gangopadhyay for The Wall Street Journal.

India’s economy grew 6.1% from a year earlier in the April-June quarter, higher than the 5.8% expansion in the preceding quarter, thanks to government efforts. The Asian Development Bank has revised its growth projection for India up to 6% from an earlier 1%-5% for 2009. The revision is based on the fact that public spending has gone up, industrial production is rising and there are signs of better business confidence, reports The Economic Times.

• PowerShares India (NYSEArca: PIN): up 69.8% year-to-date

• WisdomTree India Earnings (NYSEArca: EPI): up 83.8% year-to-date

Comments

[Mad Hedge Fund Trader]

pos India has been one of my stellar picks this year, the “I” in BRIC, rocketing 112% from the March lows (click here for my initial report ). Although it appears overheated for the short term, I believe it has much further to run over the long haul. You want to buy countries that have yet to build infrastructure and a middle class, and China has already done that. India’s per capita GDP came in at a sparse $1,016 last year, compared to $6,100 for the Middle Kingdom. China’s economy today is about on the same level that Japan experienced during the late fifties, while India is still in the late twenties, with large parts effectively mired in the 16th century. India’s recent election of a more pro-business government was the trigger for improved growth, which is expected to exceed 6% for the rest of the year. India’s economy is entirely domestic, and is so far outside the world economic system that the global financial crisis was barely felt there. While we were melting down with a minus 6% GDP rate, India continued to bask in a plus 5.8% growth rate. No subprime debt, toxic portfolios, foreclosure crisis, government bailouts, or AIG, GM, or Chrysler. With 1.2 billion consumers, some 70% of GDP there accounted for by consumer spending, so retail figures large in the country’s future. Even Harley Davidson (HOG) has big expansion plans in the world’s largest user of motorcycles. For those of the ETF persuasion, look at Wisdom tree’s earnings based offering (EPI) or the one from PowerShares (PIN). Better start checking your share prices in rupees.

2009 Oct 01 06:47 AM

[learnmoney]

Mr Lydon............have you been to India and had a look at what is going on? If not make it your next holiday destination and when you come back you will become a LONG TERM investor...........that is the key.
There is hardly a major motorway and look at what goes on with there train system jet its all there and the problem is dismantling what we Brits left them with - an outdated system including the legal one and lots of "kick backs".
Ignore all your GDP and Earnings and just lock away for 5/10 years and we will make more money than by investing in China who do not have the legal system our two countries enjoy.

2009 Oct 01 09:24 AM