📊Tapping Into One of the World's Fastest-Growing Economies

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Hello, ETF UNO reader! Are you ready to explore investment opportunities in India, one of the world’s most dynamic economies? In this guide, we’ll highlight why India is worth your attention and recommend ETFs that can help diversify your portfolio. Whether you're new to ETFs or looking to expand your investments, this is a great starting point!

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Why India ETFs?

For good reason, India has emerged as a standout performer among emerging markets. As the world's most populous country with over 1.4 billion people, India boasts a massive consumer base that continues to expand its purchasing power. The numbers speak for themselves:

• 🚀India's economy has grown at approximately 6-7% annually in recent years, outpacing many developed and developing nations.

• 🧒🏽The country's population is young, with more than half of its citizens under the age of 30, creating a demographic dividend that could fuel growth for decades.

• 💻Rapid digitalisation has transformed everything from banking to retail, with hundreds of millions of Indians coming online in recent years.

• 🌉Significant infrastructure investments are modernising the country's transportation, energy, and communication networks.

While markets naturally experience ups and downs, several factors suggest India's growth story remains compelling:

• Domestic Consumption Engine: India has a strong domestic consumption market, protecting against global economic downturns. With the middle class expected to reach 580 million by 2030, consumer spending is rising across sectors like automobiles and healthcare.

• Manufacturing Push: The "Make in India" initiative and Production-Linked Incentive (PLI) schemes aim to establish the country as a global manufacturing hub, diversify the economy beyond services, and reduce import dependence.

• Digital Transformation: India's digital revolution is remarkable, with widespread mobile technology, digital payments, and e-commerce. The Unified Payments Interface (UPI) processes billions of transactions monthly, driving the rapid evolution of the tech ecosystem and creating new business opportunities.

• Policy Reforms: India has undertaken significant economic reforms in recent years, including the Goods and Services Tax (GST), bankruptcy code updates, and corporate tax cuts, all of which aim to improve the ease of doing business and attract investment.

📃Top India ETFs

Now that we understand why India presents interesting investment opportunities let's explore five popular ETFs that offer exposure to this market. Each has its approach, expense ratio, and focus areas:

1. iShares MSCI India ETF (INDA)

Expense Ratio: 0.62%

Provider: iShares

Past 5 Years Annualised Performance: 17.95%

Covered by ETFUNO already, $INDA ( ▼ 1.66% ) is among the most popular India ETFs in terms of assets and trading volume. It provides exposure to about 100 Indian companies, INDA can serve as a core holding for investors seeking Indian market exposure.

2. WisdomTree India Earnings ETF (EPI)

Expense Ratio: 0.87%

Provider: WisdomTree

Past 5 Years Annualised Performance: 24.19%

$EPI ( ▼ 1.6% ) uses a unique approach by weighting companies based on earnings rather than market capitalisation, favouring those with strong fundamentals. With over 400 stocks, it offers broader diversification than other India ETFs. Launched in 2008, EPI is one of the longest-running India ETFs for U.S. investors.

3. Franklin FTSE India ETF (FLIN)

Expense Ratio: 0.19%

Provider: Franklin Templeton

Past 5 Years Annualised Performance: 19.9%

$FLIN ( ▲ 0.37% ) is recognised for its low expense ratio of just 0.19%, making it one of the most cost-effective ways to invest in the Indian market. This lower fee structure can lead to significant savings while still offering exposure to India's growth potential.

4. iShares MSCI India Small-Cap ETF (SMIN)

Expense Ratio: 0.75%

Provider: iShares

Past 5 Years Annualised Performance: 26.36%

$SMIN ( ▼ 2.37% ) specifically targets smaller companies that might be more directly tied to domestic economic growth. These smaller firms often have less exposure to global markets and may better reflect local economic conditions and offer higher growth potential but typically come with increased volatility and risk. SMIN holds approximately 300 small-cap Indian companies across various sectors, providing decent diversification within this market segment.

5. Columbia India Consumer ETF (INCO)

Expense Ratio: 0.77%

Provider: Columbia Threadneedle Investments

Past 5 Years Annualised Performance: 19.91%

Unlike the other ETFs in our list that provide broad market exposure, $INCO ( ▼ 0.15% ) takes a thematic approach by focusing specifically on India's consumer sector. This includes automobile, food, healthcare, media, and retail companies. It aligns with one of the most compelling aspects of India's growth story: its rising middle class and increasing domestic consumption. As more Indians join the middle class, consumer spending on necessities and discretionary items grows.

🚀Soaring High: India ETF Opportunities

India presents an attractive growth narrative, supported by favorable demographics, rising domestic consumption, and continuous economic reforms. The ETFs we’ve discussed offer various ways to access this market, ranging from broad exposure to more targeted strategies that focus on specific segments or themes. Ultimately, your choices should align with your investment goals, risk tolerance, and your perspective on which parts of India’s economy hold the most promising opportunities.

This simple weekend reading has provided valuable insights into India ETFs and helped you understand the options for adding this dynamic economy to your investment portfolio. Want to learn more about ETF investing strategies and discover other market opportunities? Join the ETF UNO newsletter today for regular updates, analysis, and investment ideas that can help you build a more diverse and resilient portfolio. Happy investing!

DISCLAIMER: This article is for informational purposes only and does not constitute investment advice. Always conduct your own research and consider consulting with a financial advisor before making investment decisions.