“The outgoing administration has finished with a tailwind of reforms, and there is a change of government after the election,” David Cornell, chief investment officer of Ocean Dial, said. “This election should enable India to further outperform its emerging market peer group.”
India country-specific ETFs have produced strong returns this year as the benchmark Sensex index broke new all-time highs this year. Year-to-date, the WisdomTree India Earnings Fund (NYSEArca: EPI) increased 10.2%, iShares MSCI India ETF (NYSEArca: INDA) rose 7.8% and PowerShares India Portfolio (NYSEArca: PIN) is up 6.4%. The ETFs include hefty weights to cyclical sectors like financials and materials, along with large allocations toward energy and technology names. [India ETFs Surge as BSE Hits Record]
The better outlook for the domestic economy would also bolster smaller companies. Investors can gain exposure to India’s small-cap stocks through the Market Vectors India Small-Cap Index ETF (NYSEArca: SCIF), EGShares India Small Cap ETF (NYSEArca: SCIN) or iShares MSCI India Small-Cap ETF (NYSEArca: SMIN). SCIF is up 18.2% year-to-date, SCIN gained 13.4 and SMIN rose 8.6%.
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Max Chen contributed to this article.