Exploring India’s Booming Economy Through ETF Investments

India’s Economy Roars Back to Life, IMF Predicts 5.9% GDP Growth in 2023

After a sharp contraction in the first year of the Covid-19 pandemic, India’s economy has bounced back with a vengeance. The International Monetary Fund (IMF) predicts that India’s Gross Domestic Product (GDP) will climb by 5.9% in 2023, signaling a strong recovery for the country.

The growth prospects for India are bolstered by a booming population and increased international investment. The United Nations projected in April that India is on track to surpass China this year as the world’s most populous country, with over 1.4 billion inhabitants. Additionally, major technology companies like Apple have announced plans to expand their manufacturing operations in India, further fueling economic growth.

Investors looking to capitalize on India’s economic resurgence have turned to exchange-traded funds (ETFs) as a way to diversify their portfolios. There are currently nine India ETFs trading in the U.S., excluding inverse and leveraged ETFs, with assets under management exceeding $50 million.

Among the top-performing India ETFs are the Franklin FTSE India ETF (FLIN), the Columbia India Consumer ETF (INCO), and the iShares MSCI India ETF (INDA). FLIN boasts the lowest expense ratio, while INCO has delivered the best 1-year return. INDA stands out for its high liquidity, making it a popular choice among traders.

FLIN tracks the FTSE India RIC Capped Index, focusing on large- and mid-cap Indian stocks in sectors like financials, technology, and energy. INCO targets consumer companies in India, with a strong emphasis on consumer discretionary stocks. INDA follows the MSCI India Index, which consists of large- and mid-cap companies trading on the National Stock Exchange of India Ltd. (NSE) and Bombay Stock Exchange (BSE).

Overall, India’s economic resurgence presents a promising opportunity for investors looking to diversify their portfolios and capitalize on the country’s growth trajectory. As India continues to attract international investment and expand its manufacturing capabilities, the outlook for the economy remains positive.