India: Increasingly Attractive Market For Global Investors
Frank Holmes | Mar 03, 2015 03:11PM ET
India had an incredible banner year. The world’s largest democracy, home to 1.25 billion people, was the best-performing emerging market in 2014, delivering over 29 percent. It was followed by the Philippines in second place and Indonesia in third.
This continues India’s story as an increasingly attractive market for global investors, a story which became even more pronounced with the May election of Prime Minister Narendra Modi, whom CLSA’s Asian market strategist Chris Wood has called “the most pro-business, pro-investment political leader in the world today.”
You can see how other emerging markets ranked in our Periodic Table of Emerging Markets, below:
It should come as no surprise that Russia—weighed down not only by falling oil prices but also geopolitical turmoil, international sanctions and a shrinking currency—fell to last place in 2014. But since then we’ve seen the federation’s market turn up, and we’ve begun the process of gaining limited exposure to Russian equities.
“The situation is Ukraine is not pretty, but global investors understand it and are getting comfortable putting their money in Russia again because it’s inexpensive,” John Derrick, portfolio manager of our Emerging Europe Fund, said during our recent webcast. “The bad news has been priced in, and it looks as if the market is willing to move higher.”
Colombia had its second consecutive down year as a result of low oil prices and socialist-type policies—heavy punitive taxation and redistribution of wealth—that have led to an anti-business environment.
Hungary tumbled pretty sharply because of its government’s siding with Russia on several issues. It’s moved much closer to the federation than the rest of Europe and staunchly opposes the international sanctions.
As for India, it continues to impress. Year-to-date, the S&P BSE SENSEX has returned over 6 percent, compared to the S&P 500 Index’s 2.3 percent.
Disclosure and Disclaimer: Past performance does not guarantee future results.
Foreign and emerging market investing involves special risks such as currency fluctuation and less public disclosure, as well as economic and political risk. By investing in a specific geographic region, a regional fund’s returns and share price may be more volatile than those of a less concentrated portfolio. The Emerging Europe Fund invests more than 25% of its investments in companies principally engaged in the oil & gas or banking industries. The risk of concentrating investments in this group of industries will make the fund more susceptible to risk in these industries than funds which do not concentrate their investments in an industry and may make the fund’s performance more volatile.
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The S&P BSE SENSEX Index is a free-float market-weighted stock market index of 30 well-established and financially sound companies listed on the Bombay Stock Exchange.
The S&P 500 Stock Index is a widely recognized capitalization-weighted index of 500 common stock prices in U.S. companies.
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