Rising to the occasion: India in the twenty-first century
Emerging Market Equities Portfolio Manager Matthew Culley and the Janus Henderson Research Team explain how India is leveraging government reforms and innovation to position itself to deliver strong economic and earnings growth.
9 minute read
Key takeaways:
- India’s reformist government recognizes that an innovative private sector has a pivotal role to play in achieving the country’s economic and social goals.
- To help seize the opportunity, India has prioritized building out physical, digital, and social infrastructure.
- Further buoying India’s position as a potential investment destination are a restructuring of global supply chains and flagging developed market growth.
In an era where globalization appears to be on the wane, the landscape for investing in emerging markets (EM) is shifting. A dispersion of economic prospects should result in both winners and losers. Consequently, investors seeking to access the powerful secular growth themes embedded in emerging regions will have to be more discerning. We believe a sweet spot going forward will be EM countries that possess both a reformist government and an innovative private sector. India is one such country.
This nexus, along with India’s favorable demographics, aligns with the country, company, and governance approach that, in our view, serves as an effective framework for EM investors.
Within the EM asset class – especially during a period of economic and policy transition – investors may understandably place considerable emphasis on the macro. We have written extensively on the country aspect with respect to India’s reformist government and will provide a sufficient summary in this note, but our focus will be on the company level – namely the sectors in which well-positioned and innovative businesses thrive. Over the long term, one of the main determinants of equity returns is earnings growth. A favorable macro backdrop and robust corporate governance matter insofar as these factors set the stage for companies to invest, innovate, and grow.
Read more
Emerging market investments have historically been subject to significant gains and/or losses. As such, returns may be subject to volatility.
Foreign securities are subject to currency fluctuations, political and economic uncertainty, increased volatility and lower liquidity, all of which are magnified in emerging markets. Fixed income securities are subject to interest rate, inflation, credit and default risk. As interest rates rise, bond prices usually fall, and vice versa.
Volatility measures risk using the dispersion of returns for a given investment.
Important information
Please read the following important information regarding funds related to this article.
Key investment risks:
- The Fund's investments in equities are subject to equity securities risk due to fluctuation of securities values.
- Investments in the Fund involve general investment, currency, liquidity, hedging, market, economic, political, regulatory, taxation, securities lending related, reverse repurchase transactions related, financial and interest rate risks. In extreme market conditions, you may lose your entire investment.
- The Fund may invest in financial derivatives instruments to reduce risk and to manage the Fund more efficiently. This may involve counterparty, liquidity, leverage, volatility, valuation and over-the-counter transaction risks and the Fund may suffer significant losses.
- The Fund's investments are concentrated in emerging markets (excluding China) and may be more volatile.
- The Fund may charge performance fees. An investor may be subject to such fee even if there is a loss in investment capital.
- Investors should not only base on this document alone to make investment decisions and should read the offering documents including the risk factors for further details.
9 minute read
Key takeaways:
- India’s reformist government recognizes that an innovative private sector has a pivotal role to play in achieving the country’s economic and social goals.
- To help seize the opportunity, India has prioritized building out physical, digital, and social infrastructure.
- Further buoying India’s position as a potential investment destination are a restructuring of global supply chains and flagging developed market growth.