India’s demographics provide a strong tailwind given its sizeable, youthful and aspirational population. With over 50% of the population aged below 30, it is expected than locally listed companies will prosper from the increased need for infrastructure, a growing consumption base leading to changing tastes and preferences and the emergence of several industries which create a comparative advantage for India’s exports.
India given its significant growth is a commodity importer and thus has low economic and capital market correlation to economies like Australia and New Zealand. This means investing in India provides diversification to investors based in more commodity producing economies, with investments in their local equity markets. This is particularly apparent in how the currency of India (Rupee) behaves relative to the Australian or New Zealand Dollar.
India’s equity markets contain over 6,000 listed companies, with several still yet to be researched by stockbrokers or discovered by a broader base of investors. This provides significant opportunity for investors to participate in their growth from an earlier stage. We believe India is a market which is highly conducive for astute, locally based stock pickers who understand their own ecosystem through their own experiences. Our Fund provides access to some of India’s best stock pickers.
India’s listed companies have been able to generate robust profit growth over the last few decades given the benefits of scale. As most industries in India are driven by structural tailwinds, the profitability of these companies allow for significant compounding benefits for investors. Company management is generally focused on driving capital growth for investors, which again provides a difference to the equity markets of Australia and New Zealand, which tend to be more yield driven.
India is going to be the world’s third largest economy by 2035, if not before. Investors should seek to be ahead of the curve, rather than follow other large institutional investors into it. India’s stock markets are difficult to navigate, but investing through a Fund like ours makes it easy.