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With the seemingly positive relationship between Trump and Modi, do you think Indian ETFs are a good place to invest?

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Asked on February 15, 2025 6:30 am
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Thanks for the great response. Much appreciated.

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Posted by vikashagarwal@hotmail.com
Answered on February 18, 2025 10:29 am
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India is one of the fastest growing economies in the world at this point in time, so I can certainly see why there is interest. While North America has a slower growing, older population, India is almost the complete opposite. They're younger and faster growing. This is due to a wide variety of factors, most of which I won't get into, but it certainly is a bright spot when it comes to a countries efficiency.

I think they are a fine country to invest in. The only difficulty here is we do have a bit of a more unstable political environment, one that is prone to regulatory changes or large tensions with places like China, Pakistan etc. For this reason, these stocks are typically cheaper as money isn't flowing into them as extensively as US equities, where regulatory changes and tensions are rare (except for now... unfortunately) due to the economy being so stable.

I don't think you're wrong in wanting exposure to the country. I wouldn't really base it on Trump's relationship, I'd more so base it on the underlying strength of India's economy. Just know that similarly to Canada, they are heavily focused on financials and energy. It makes up nearly 45%~ of the Nifty 50, which is what this ETF tracks.

Also take into account that just because the economy is growing and the underlying companies are doing well does not translate into high returns. International equities have underperformed the US for quite some time now as the bulk of investing interest has been towards US equities. That could change, but it also could not, which would lead to these types of countries lagging in terms of returns.

If you're looking for international diversification, I think it is a solid fund to allocate a small portion of the portfolio to.

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Posted by Dan Kent
Answered on February 17, 2025 8:18 am