Long-Term Outlook Bright for India ETFs | ETF Trends

There’s been ample attention paid to the performances of India stocks and related ETFs over the past several years and what might be in store for those assets as 2024 moves along.

But likely owing to the short-term views held by many market participants, the longer-ranging outlooks for funds such as the WisdomTree India Earnings Fund (EPI) might not be fully appreciated. That should not be the case. After all, by some estimates, India will be the world’s largest or second-largest economy in the coming decades.

With economic expansion forecasts likely coming, so too would similarly bullish views on the country’s financial markets. In what could be a long-term positive for EPI, Jefferies recently forecast that India’s equity market could reach a combined capitalization of $10 trillion in 2030. That’s more than double the current size.

Big Growth Could Be Ahead for India ETF EPI Holdings

A combined market value of $10 trillion might not sound impressive to the U.S. at a time when the top four components in the S&P 500 have a combined market cap of almost $9.7 trillion, but consider the following, courtesy of India Briefing.

India’s stock market was worth $1 trillion in late May 2007 and needs another decade to double in size before joining the $3 trillion club four years later. In other words, if the aforementioned Jefferies forecast proves accurate, India’s equity market could notch tenfold growth in less than a quarter of a century. That has the potential to benefit ETFs such as EPI.

“India has established itself as a rival to China because of its rapid increase in equity share, drawing in new investment from both international corporations and investors. The country’s stable political system and consumption-driven economy, which continues to be among the fastest-growing among major nations, are additional factors that may have contributed to the strong performance,” according to India Briefing.

Confirming that India is a rising player on the global market cap stage, the National Stock Exchange of India is the sixth-largest equity market in the world, trailing only the New York Stock Exchange , the Nasdaq, Europe’s Euronext, Japan, and the Shanghai Stock Exchange. With the help of some EPI holdings, India’s major bourse is larger than rivals in Shenzhen, Hong Kong, and London, just to name a few. For patient investors, EPI could potentially deliver impressive long-term gains.

“National Stock Exchange (NSE) CEO Ashish Chauhan predicts India’s market capitalization may reach up to US$50 trillion in the next 20 years,” added India Briefing.

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