Investor sentiment in emerging markets (EM) appears to be improving, and one country that may offer up opportunities for growth plays is India.

The pandemic was certainly a thorn in the side of emerging markets as COVID-19 ravaged economies, large and small. However, more investors could be dipping their toes back into EM assets as the MSCI Emerging Markets Index starts to stabilize.

^MSEM Chart

One country that offers strong rebound prospects is India. The MSCI India index is heading towards a 30% gain for the year as analysts see strong growth prospects for the country ahead.

“The economy is likely to record a 9.5 per cent growth this fiscal over 7.3 per cent contraction last year, as the ongoing recovery is faster and more credible than earlier foreseen, according to a foreign brokerage report,” a MENAFN report noted. “It will gather more momentum in the second half of the current fiscal, but will slow down to 7.7 per cent next financial year, it added.”

“The government has budgeted for a 10.5 per cent growth this fiscal, but the Reserve Bank has scaled it down to 9.5 per cent,” the report added further. “Ravaged by the pandemic, the economy tanked 7.3 per cent last fiscal, the worst and the third contraction on record.”^MSIN Chart

India ETF up 24% YTD

With the bright growth prospects in India, one ETF worth looking at is the Invesco India ETF (PIN). Since May, the fund spiked strongly to the upside, rising 24% on the year.

PIN seeks to track the investment results of the FTSE India Quality and Yield Select Index. The underlying index is a modified-market capitalization-weighted index of equity securities that are traded on the National Stock Exchange of India.

“This ETF offers exposure to Indian equity markets, making PIN one of many ETF choices for investors looking to access an emerging market that maintains both tremendous growth potential and considerable volatility,” an ETF Database analysis offered. “Considerable India exposure is a part of many broad-based emerging markets ETFs, but those looking to overweight this economy may find PIN to be a useful tool.”PIN Chart

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