in our view, India is the best structural growth opportunity in emerging markets (EMs), if not the world. As China’s growth ebbs and investors look for alternative growth markets, India has a generational opportunity to become the growth engine of EM and international markets, as we believe gross domestic product (GDP) can grow above 6% for years to come. Furthermore, the combination of the world’s largest general and youth populations, which provides a demographic dividend, coupled with a market friendly and democratically elected government, creates a powerful backdrop for stock selection and potential outperformance.
Key Reasons for Optimism on India
- Risk Adjusted Returns: Since inception in 1995, India’s benchmark equity index, the Nifty, has a ratio of annualized returns over its volatility of 0.57, which compares to the Nasdaq 100 with a ratio of 0.54 and the S&P 500 at 0.46. The data show that, historically, the Indian market has offered robust returns with reduced volatility. We also note that India’s equity market has delivered seven consecutive years of gains (in rupee terms).
Fidelity Emerging Markets Limited (LON:FEML) is an investment trust that aims to achieve long-term capital growth from an actively managed portfolio made up primarily of securities and financial instruments providing exposure to emerging markets companies, both listed and unlisted.
