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India ETFs Hitting 52-Week Highs: Here's Why

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As global investors assess their options in the changing backdrop of international investments, one country seems to be capturing the spotlight: India. Several India ETFs including Vaneck India Growth Leaders ETF (GLIN - Free Report) , Vaneck Digital India ETF (DGIN - Free Report) , Franklin India ETF (FLIN - Free Report) , iShares MSCI India Small-Cap ETF (SMIN - Free Report) and Wisdomtree India Earnings Fund (EPI - Free Report) have hit a 52-week high lately. We'll tell you why.

India: A Land of Untapped Potential

A recent assessment by Jitania Kandhari, Deputy Chief Investment Officer for Solutions & Multi-Asset at Morgan Stanley, highlights India's unique position as a hotspot for investment, contrasting it with the challenges faced by its neighbor, China, as quoted on CNBC.

Kandhari's insights shed light on India's underinvestment scenario, where the investment to GDP ratio has been on a decline. However, a significant shift is underway. There has been a push among companies to diversify supply chains.

This strategic shift has led to a resurgence in investment and manufacturing activities in India. With its vast pool of skilled labor and a consumer market poised for growth, India presents an enticing opportunity for investors looking to capitalize on its potential.

Real Estate Resurgence and Global Centers

One of the standout areas of potential growth lies in India's real estate sector. Kandhari notes that India's real estate market is at the beginning of a new cycle, buoyed by initiatives such as "made in India" and the establishment of global centers.

Unlike China, which grapples with oversupply and debt-related challenges in its real estate sector, India is characterized by an undersupply of homes and property. This imbalance opens the door for investment in housing and property development, a sector with immense growth potential.

Global Companies Eyeing Manufacturing in India

The economy's narrative is bolstered by its positioning as an attractive hub for global investments, particularly in the wake of the pandemic-induced remote work trend. As global companies set up operations in India, the country's economic potential is further enhanced. Notably, Tesla (TSLA - Free Report) is mulling over to set up India factory for electric cars. Apple’s (AAPL - Free Report) hardware manufacturing partner Foxconn is reportedly set to kickstart manufacturing of iPhone 15 series at its Tamil Nadu plant soon.

Upbeat GDP Growth in Q2

India's economy grew 7.8% in the Q2, the maximum in a year and slightly surpassing market expectations of a 7.7% expansion. The robust performance of the service sector can be attributed for the GDP growth, coupled with strong consumer demand and increased government capital expenditure.

 


 

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