Investing in India

Blisterman

The balance of global economic power is slowly but surely heading East, which seems to indicate that that's the area to look at for steady long term gains.

The level of government involvement in its businesses scares me off investing in China. India on the other hand looks a much more enticing option. There's a young rapidly expanding middle class, huge economic growth, and an enormous population more and more of whom are being lifted out of poverty.

The question is, how do I tap into this potential? I'm only investing a small amount each month, so ideally it'd be within the LSE as international share dealing fees are extortionate compared to the amount I'd be putting in each month.

One option I've seen is this
http://uk.ishares.com/en/rc/products/NFTY

It's an ETF which tracks the Nifty index of 50 large indian firms. I can't find much information on it online. Has anyone any knowledge of whether this is a good way of buying in to India's economic growth? The only downside is that the companies in it are already huge, whereas I'd imagine a lot of the growth will be in medium and small caps.

RR2026

VEDANTA RESOURCES is one good option. see link below
http://uk.finance.yahoo.com/q?s=VED.L

Blisterman

Is that wrong or does it really have a P/E of 431.74!

Seems as though a huge amount of expected growth is already factored into the price.

soddy1979

NFTY gives exposure via swaps. It notes that the swaps are over-collateralised, so that's a good thing for counterparty risk.

Ishares also have an ETF called INDY - I think this may have lower overall expenses (.89%), whereas NFTY has 0.85% + .18% swap spread.

There are also a few small cap India ETF's like SCIN & SCIF.

RATM

soddy1979 wrote: »

There are also a few small cap India ETF's like SCIN & SCIF.

I just googled those two and there seems to be a lot of corruption & losses of 20% associated with them back in 2010. Have things improved since ? I'm also in the markets soon for ETFs in the BRIC countries and would value any insight.

Raskolnikov

You have to be very careful when looking at Indian funds/ETF's as the disparity in results between them is huge. There's a few closed-end funds (which I imagine would have had more small-cap exposure) that have performed abysmally compared to INP and NFTY.