Markets and stock trade on expectations, and expectations for India are optimistic once again, as demonstrated by the recent performance of the Bombay Stock Exchange which is up more than 20% since the beginning of the year. According to Franklin Templeton Investment's chair Mark Mobius, India is in a bull market that he predicts is likely to continue for some time. He expects inflows from foreign institutional investors into India could double in the next year given the revolutionary changes occurring in the country.
Ways to Invest in India
I have significantly increased my investment exposure to India. It is difficult to invest in individual stocks on the Bombay stock exchange and there are only about 20 stocks that trade as ADRs on U.S. exchanges. So I am opting to gain broad India market exposure through the utilization of exchange-traded funds, closed-end funds or mutual funds.
One mutual fund I like is the Matthews India Investor Fund (MINDX).
Here are the top ten holding for the fund, which currently holds a total of 32 names:
- Emami Ltd. 6.58%
- Kotak Mahindra Bank Ltd. 5.29%
- ITC Ltd. 5.14%
- Gujarat Pipavav Port Ltd. 4.47%
- HDFC Bank Ltd 4.46%
- Dabur India Ltd. 4.35%
- Info Edge (India) Ltd. 4.22%
- AIA Engineering Ltd. 4.13%
- Exide Industries Ltd. 4.07%
- Sun Pharmaceuticals Industries Ltd. 3.89%
Only one of this fund's top ten holdings trades as an ADR on a U.S. exchange, and that's HDFC Bank (HDB).
There are also several ETFs that track the Bombay Index such as the Barclays Bank Plc iPath MSCI India Index ETN (INP).
Morgan Stanley also has a closed-end fund that invests in India companies (IIF).
These are just a few of the vehicles I am utilizing with my clients to gain exposure to the investment opportunities in India. Given the limited opportunities available in the U.S. markets this year, it makes sense to pursue superior prospects abroad in order to bolster investment returns.
This article represents the opinion of a contributor and not necessarily that of TheStreet or its editorial staff.