4 Reasons India ETFs May Be Powerhouses
July 21st 2009 at 2:00pm by Tom Lydon
The worst of the global financial crisis seems to be over for some emerging nations, in particular India, meaning that it may be time to explore the various exchange traded fund (ETF) options available.
It is anticipated that the South Asian nation will grow between 6.25% and 7.75% in the current fiscal year. The speed at which India’s GDP will grow is heavily dependent on the overall health of the global economy and especially the United States, states Neelabh Chaturvedi and Abhrajit Gangopadhyay of The Wall Street Journal.
- India’s recovery is likely to be aided by favorable external factors such as a pickup in trade and resumption of capital flow into the stock market.
- A revival in exports and the effects of previous fiscal and monetary policies will also help the nation’s economy to expand.
- The most recent decline in commodities prices, most notably crude oil, will shrink oil import bills reducing the nation’s trade gap.
- The cut in factory levies and increase of employee salaries by the federal government will aid in the health of India’s economy.
On the negative side, mother nature may hinder the nation’s recovery. Monsoon rains are threatening the annual output of staple crops such as sugar cane, wheat and oil seeds, states Gangopadhyay. Watch the trend lines for any signals of a turnaround.
- WisdomTree India Earnings Fund (EPI): up 60.4% year-to-date
- PowerShares India Portfolio (PIN): up 52.4% year-to-date
Kevin Grewal contributed to this article.
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.