Opinions
Cameron Hurst
iShares MSCI India ETF
INDA-US
TOP PICK
Aug 09, 2017
Stock price when the opinion was issued
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(A Top Pick August 9, 2017. Up 6%). He stepped away from emerging markets earlier this year but India still offers a good multi-year story. India adopted a biometric identity card system that puts everyone into the standard economy and away from the shadow economy. Deposits at banks are way up because of this. There are many other healthy signs in the economy. BUT, if emerging markets suffer, India will suffer. Because he doesn’t have to be in EM, he’s out of this for now.
The question was on buying an ETF for India. He likes the idea of investing in India. He thinks China will continue to struggle and this benefits India which has good potential at 8% GDP growth forecast. For U.S. dollars he recommends INDA and for Canadian dollars he suggests ZID. He reminds investors that there is a lot of volatility in foreign markets.
INDA is a bit more diversified with 70-90 stocks, instead of just the top 50 of INDY. The MERs are fairly pricey around 90 bps or so. The MER for EPI is somewhat smaller, around 30 bps lower.
He's not that familiar with that market or the companies in those ETFs. Modi has made changes there, mainly to the good. But ethnic divisiveness is a serious issue. He's not investing there for his clients at this point.
India is a 6%-7% GDP grower with a long runway. On infrastructure, they have major plans in place. It recently had a hiccup when they brought in the demonetization in 2016. Basically, everybody now has to have a metric identification card. It pulled all the money out of the banking and cash market, and into the banking system. Since 2014, they’ve had $10 billion in bank deposits, which has legitimized a significant portion of the economy, and kind of got it on track. Now they are putting GST in place. Everything is chugging along to upscale this economy.