Why India is Poised for Potential Growth

Doug Fabian

Doug Fabian is known for his expert knowledge of ETFs, bear funds and enhanced index funds to profit in any market climate.

India, one of the most populous nations on Earth, is an interesting country for investors because it holds the promise of significant growth potential. Its unique characteristics include a population that is young compared to developed nations, the presence of some world class universities and the availability of many employable, English-speaking people. But the country has not yet managed to overcome regulatory obstacles and other problems that have held it back from achieving higher growth rates in the past. However, the recent election of a new, pro-business prime minister makes now a good time to consider investing in funds such as the Market Vectors India Small-Cap ETF (SCIF).

The election of conservative Bharatiya Janata Party (BJP) leader Narendra Modi as prime minister sets the stage for this BRIC (Brazil, Russia, India and China) country to grow rapidly. In fact, some observers anticipate this economic expansion will occur relatively quickly, as it has in some other Asian countries that modernized and adopted business-friendly policies.

SCIF is an exchange-traded fund (ETF) that seeks to replicate the results, before fees and expenses, of an index of small-capitalization companies that either are headquartered in India or generate most of their revenues in the country. If you are risk averse, keep in mind that this country-specific ETF is not diversified.

So far this year, SCIF has gained 53%, with a significant climb occurring after Prime Minister Modi’s election. Recently, subscribers to my Successful ETF Investing service made more than 25% in profits on a short-term trade with this ETF. In 2013, the fund’s gain of 185.07% far outperformed the U.S. market.

Exclusive  Top International Dividend ETF is Worth Considering

SCIF_070914

SCIF’s top 10 holdings represent 27.75% of its total assets. These holdings include Unitech Ltd, 4.32%; Suzlon Energy Ltd, 3.24%; Jain Irrigation Systems Ltd, 2.77%; IFCI Ltd, 2.69%; and Vakrangee Software Ltd, 2.67%. The top sectors held by SCIF are consumer cyclical, 21.77%; industrials, 17.28%; financial services, 15.89%; and technology, 9.84%.

In addition, not only is SCIF a way to invest in India, which seems poised to prosper, but this particular ETF also focuses on small-cap stocks. As we have previously written, small caps have traditionally outperformed the broader stock market, at least here in the United States. Applying this lens to the Indian situation can make investing in Market Vectors India Small-Cap ETF (SCIF) potentially even more appealing.

If you want my advice about buying and selling specific ETFs, including appropriate stop losses, please consider subscribing to my Successful ETF Investing newsletter. As always, I am happy to answer any of your questions about ETFs, so do not hesitate to send me an e-mail. You just may see your question answered in a future ETF Talk.

In case you missed it, I encourage you to read my article from last week about how Russia’s rebound could be good for investors. I also invite you to share your thoughts below.

previous article

This time of year -- essentially the halfway point -- is a great opportunity for you to do a little post-analysis of your investment holdings to see where you are, and to see if where you are is where you want to be.

PREMIUM SERVICES FOR INVESTORS

Dr. Mark Skousen

Named one of the "Top 20 Living Economists," Dr. Skousen publishes 5 different investment newsletter advisories, including the award-winning Forecasts & Strategies, which has beaten the market over the last 15 years.

Product Details

LEARN MORE HERE

Bryan Perry

A former Wall Street financial advisor with three decades' experience, Bryan Perry focuses his efforts on high-yield income investing and quick-hitting options plays. Bryan's four newsletter and trading services include:

Product Details

LEARN MORE HERE

Nicholas Vardy

A Stanford and Harvard Law graduate, Nicholas Vardy scours over 40 different global markets every day to uncover new profit opportunities for subscribers. His 3 advisories and trading services include:

Product Details

LEARN MORE HERE

Jim Woods

A 20-plus-year veteran of the markets, Jim Woods has varied experience as a broker, hedge fund trader, financial writer, author and newsletter editor.

Product Details

LEARN MORE HERE

Bob Carlson

In Bob's monthly newsletter, Retirement Watch, he provides independent, objective research covering all the financial issues of retirement and retirement planning. In addition, Bob serves as Chairman of the Board of Trustees of the Fairfax County (VA) Employees’ Retirement System, which has over $2.8 billion in assets.

Product Details

LEARN MORE HERE

Mike Turner

Mike’s financial, mathematical, computer science and engineering background serves as the foundation for his disciplined, rules-based approach to trading. Mike’s three services include:

Product Details

LEARN MORE HERE

DividendInvestor.com

Used by financial advisors and individual investors all over the world, DividendInvestor.com is the premier provider and one-stop shop for dividend information and research.

Product Details

Popular tools include our proprietary Dividend Calendar, Dividend Calculator, Dividend Score Card, and many more.

LEARN MORE HERE