India, Asia’s third-largest economy, is one of the best-performing emerging markets this year, a theme that is being reflected in a batch of US-listed India exchange traded funds. For example, the iShares MSCI India ETF (BATS: INDA), PowerShares India Portfolio (NYSEArca: PIN) and the WisdomTree India Earnings ETF (NYSE: EPI) have all posted double-digit year-to-date gains.
Those ETFs are among the largest and oldest India ETFs trading in the U.S. and are mostly focused on large-cap Indian equities. New Delhi projects India’s economy could expand between 6.75% and 7.5% in 2017-18 as the government shifts tactics on its economy.
India’s market suffered a blow at the end of 2016 after Prime Minister Narendra Modi yanked about 86% of all cash from the economy to fight so-called black money to fight back against the huge shadow economy. While the economy may experience a short-term setback from the move, the results of demonetization could usher in long-term benefits to the economy.
Franklin Templeton’s Mark Mobius noted in an interview with CNBC that “India’s economy is growing at a faster clip than China’s, and he sees tax reform implemented under Prime Minister Narendra Modi as a positive for the market. And as the market sees more state-owned company shares flowing into the market, Mobius said this is a sign that “more reform” is coming.”