Stockchase Opinions

Richard Croft BMO India Equity Hedged to CAD ETF ZID-T BUY Aug 21, 2019

Long term? India should be in a portfolio, because it is a growing economy with a middle class larger than the US population. Don't invest a lot here, but some, say 5%, the same weighting as China's. But India needs to further build its infrastructure, nowhere near China's. The president is pro-business.
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BUY
He's a big fan of EM. India is a good, long-term play: a good banking system and fine demographics. But India is very expensive vs. other EM countries according to earnings. India's growth will continue. India's growth contribution to the world will rise from 9% to 12% in five years. In contrast, America's contribution will decline.
WEAK BUY
India is interesting, because 300 million people there are now middle class. India has a lot of potential, and he would hold a small position.
PARTIAL BUY
ZID is as good as any. India is a large, diverse economy with 300 million in its middle class. But don't put a lot of money in here; India doesn't invest in economy like China.
COMMENT

Modi is now allowing Apple to do business there. India's had problems with bureaucracy, and if he makes it easier for foreign companies to come in and raise capital, it could be great. It depends on how the trade talks will go in terms of China. China has many geopolitical issues.

BUY
A long-term ETF? Yes. It's a great long-term growth story for EM, especially India. VE also covers EM, but not just India, but Hungary, Mexico and several others. India is the only EM market he likes now, because of its growing middle class and PM Modi getting re-elected. "Long term" means at least 7 years.
DON'T BUY

India is one of those areas of the world where people talk of the long term story. They are relatively insulated from trade wars. He is caught on the long term India market. It is expensive. He owns SCIF-N.

BUY

Would not worry about currency hedge - complex trade with costs. Overall a good product if looking to get exposure to India. 

BUY

India has been an amazing growth story, attracting enormous interest. India ETFs in Canada and US tend to be more expensive. Uses MSCI for screens on ESG, which would screen out tobacco and firearms among others. Tries to achieve a balanced sector exposure. One of the better ways to get India from Canada. MER is only 67 bps, significantly cheaper than XID and others.

BUY

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.