Looking for High-Growth Stocks? Take a Look At This

India has overtaken China as the most promising emerging market investment for long-term investors.

In ease of doing business, cost of doing business, and demographics, India trumps China. Its large population and economy ensure that it will be a large market and investment hub for years to come.

Investors can capitalize on this opportunity by buying shares in an India based ETF like iShares MSCI India ETF (INDA) and shorting Chinese ETFs like iShares FTSE/Xinhua China 25 Index (FXI).

The average September P/E for the Indian stock market is 24 times compared to 25 times for the S&P 500 (SPY); this is a good deal considering how much growth Indian stocks have in an economy that may soon enter super-growth.

India is weighted 8% of the iShares MSCI Emerging Markets Indx (EEM), and there are several India-based ETFs to choose from.

Looking for High-Growth Stocks? Take a Look At This
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I believe these funds will perform best if bought now and held for the long-term (5 to 10 years). This is essentially an index investing strategy, where the alpha of the individual stocks in India are not considered, and gains are made from the general upward trend in the Indian stock market and economy.

The iShares MSCI India ETF is already dramatically outperforming the iShares MSCI Emerging Markets ETF.

India ETFs essentially index the Indian stock market, but there are many options to choose from. The performance will be similar, but there are differences in expense ratio, and holding percentages.

The iShares MSCI India ETF (INDA) has an expense ratio of 0.94% and holds stocks such as Tata Consultancy Services Limited, Infosys Ltd (INFY), and Tata Motors Limited (TTM)

PowerShares India Portfolio (PIN) has an expense ratio of 0.85% and gives good exposure to the Indian pharmaceutical industry with holdings like Sun Pharmaceutical Industries Limited, which comprises over 4% of the fund

Direxion Daily India Bull 2X Shares (INDL) is a leveraged ETF, offering 3 times exposure to the daily movements in the Indian stock market. The expense ratio is 0.95%.
Performance in these funds is virtually identical, and selections should be made based on expense ratio, brand preference or volume. The leveraged option INDL should be used as a day trading tool, and not held long-term.


Investors are fleeing the Chinese market, and moving on to better opportunities. China has sky-high property prices, invasive government policies, and bad population demographics.  If you are interested in emerging market investments, India is your best bet.
Published on Oct 4, 2016
By Will Matte
Will Matte is a skilled content strategist from Chattanooga, TN with over five years of experience. He specializes in creating high-quality copywriting that helps clients meet their business goals. Will spends the majority of his time creating content, driving user engagement and transforming websites into respected authorities in their fields. Visit him at www.willmatte.com

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