Having spent time in the "economic and stockmarket wilderness", India is worth a second look according to the managers of J.P. Morgan's Luxembourg-registered India fund.
For those looking for value from emerging markets, the Indian economy is now beginning to turn heads once more.
“The Indian government has made significant policy changes as GDP growth dipped to a decade low of 5% for 2013-14 (4.8% for the first quarter of 2013) compared with its 15-year average of 7.3% a year,” explains Rajendra Nair. “India had been suffering from political deadlock, which was having an adverse impact on the economy, with knock-on effects for Indian companies. We now feel an economic recovery is made more likely by the measures that have been undertaken thus far.”
Co-manager Rukhshad Shroff adds that the signs for investors in Indian companies are encouraging. “Measures of valuing companies’ shares, such as price-to-earnings ratio and price-to-book value, are below their long-term averages, meaning shares can be bought relatively cheaply, while analysts expect strong growth in company earnings over the coming years.”
Shroff adds that given the current opportunity to buy growing companies at below-average valuations, J. P. Morgan Asset Managers remains optimistic that Indian equities have the potential “to perform significantly better over the next few years than they have in the recent past.”
JP Morgan India fund is also registered in a number of individual countries, including the UK as an investment trust.
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