U.S. investors have several options when it comes to investing in India: mutual funds, ETFs and closed end funds.
India focused funds were hit hard by the global slowdown in 2008, but they have bounced back significantly in 2009--nearly fully recovering from a 53% loss. The Indian stock market has rebounded more than most emerging and developed markets in 2009, and investors both in the country and abroad have been funneling funds into this emerging market.
The Matthews India Fund
Eaton Vance Greater India Fund A
Eaton Vance Greater India Fund B
offer investors specific exposure to India's economy.
Matthew's MINDX is managed by Sharat Shroff, who favors stocks with growth prospects that are tied to the rising tide of Indian income. Historically, the companies in the fund have generally been small-cap and mid-cap firms that are undervalued in the current marketplace. As of March 31, the top holding in MINDX' portfolio was Bharti Airtel Ltd. Year to date, MINDX is up 40.14%. MINDX has a 1.29% expense ratio.
ETGIX and EMGIX have been focusing on Indian stocks with good earnings visibility and strong corporate governance. As of March 31, financials and industrials were the two largest sectors in the fund, with 23.01% and 19.08% allocations, respectively. Reliance Industries currently tops the list of the Greater India Fund's holdings. Year to date, EMGIX is up 44.87 and ETGIX is up 45.31%.
ETGIX has a front load fee of 5.75% and an expense ratio of 2.12%. EMGIX has a 5.00% deferred load fee and a 2.62% expense ratio.