EXCLUSIVE: India To Lead Emerging Markets, Driven By Modi's 'Pro-Business Environment,' Says WisdomTree CIO

In a landscape teeming with global investment opportunities, one nation shines with resolute promise: India. In an exclusive interview with Benzinga, Jeremy Schwartz, global chief investment officer at WisdomTree, revealed compelling insights that position India as an investment powerhouse.

What Sets India Apart

Among the developed and emerging markets, WisdomTree’s strategic vision spotlights India as one of its top picks alongside Japan. According to Schwartz, India “is positioned as the leader of emerging markets (EM).” What sets India apart is its undeniable dominance among the EMs which is propelled by robust population growth—a demographic dividend that fuels unparalleled GDP expansion, he notes.

Moreover, India’s economic prowess finds validation in its equity market performance, emerging as a frontrunner among its emerging market counterparts.

Chart: Benzinga Pro

Indian Equity Has Outperformed Other Emerging Markets

The Indian equity-tracking WisdomTree India Earnings Fund ETF EPI has returned 9.43% so far this year. Chinese equity-tracking iShares China Large-Cap ETF FXI and Brazilian equity-tracking iShares MSCI Brazil ETF EWZ have returned +8.61% and -9.34% over the same period.

Schwartz also noted that “interest in China has become more contentious with geopolitical headwinds and sluggish economic growth” causing investor attention to pivot towards India, as investors seek stability and growth in an increasingly uncertain global landscape.

Schwartz draws attention to India’s investment appeal being validated by the sustained momentum of the WisdomTree EPI ETF. The fund has witnessed substantial inflows quarter after quarter since 2023. This surge in investor interest underscores the growing confidence in India’s economic trajectory and its burgeoning equity market potential.

For additional perspective, Indian-equity tracking ETFs have all delivered decent returns so far this year.

Chart: Benzinga Pro

While the EPI has clearly led, returning 9.43% to investors so far this year, other funds such as the iShares MSCI India ETF INDA, the Franklin FTSE India ETF FLIN, the iShares MSCI India Small-Cap ETF SMIN and the iShares India 50 ETF INDY have each returned 7.13%, 7.06%, 6.80% and 2.69%, respectively, YTD.

Also Read: Apple’s Pivot-From-China Gamble Pays Off: 1 In 7 iPhones Now Made In India

Schwartz Identifies A Pivotal Catalyst – Prime Minister Narendra Modi’s Success In The Spring Elections

A pivotal catalyst for India’s continued success lies in the upcoming spring elections in India.

“WisdomTree believes Prime Minister Narendra Modi's Bharatiya Janata Party looks like it will be successful in the upcoming spring election as well,” said Schwartz. This electoral victory would herald a stable environment conducive to further economic expansion and sustained equity market growth.

“We expect Prime Minister Modi to engage in further economic reforms that will continue his pro-business environment,” he added.

WisdomTree’s unwavering confidence in India’s economic resilience is underpinned by Modi’s pro-business agenda. According to Schwartz, his success should help usher a new era of economic reforms.

As India embarks on this transformative journey, investors stand to reap the rewards of a burgeoning economy poised for exponential growth.

Read Next: China Accounts For ‘Nearly Half Of Asia-Pacific GDP’ While India Is A ‘Bright Spot,’ Economist Says: Key ETFs To Watch

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