Go overweight to India
There is strong evidence for investors to be overweight in Indian exposures, as the Organisation for Economic Cooperation and Development (OECD) was predicting strong growth over the coming two years, according to investment analysis firm, Arkaba Advisors.
The OECD believed Indian gross domestic product would grow by 7.5 per cent in 2017 and 8.7 per cent in 2018, bolstered by a large increase in public wages and declining inflation.
India had stronger foreign direct investment than China, while its internal consumption and industry could support the nation's growth, the firm said. Meanwhile, China was dependent on global trade for its growth, while India was not.
Arkaba Advisors assessed the Indian economy and the Jaipur India Growth fund and found that the fund was well placed to benefit from such growth, while it had strong investment strategies, investment processes and risk management.
"An investment in the fund provides an opportunity to access the Indian growth theme through a vehicle that is low in cost, but with access to the largest investment managers in India thereby reducing some of the associated emerging market risks," the firm said.
An allocation to the Jaipur India Growth fund would be a rational move if investors took the view that western economies would be growing slower for longer, while India was growing much faster, the firm said.
"We believe that such an investment can be funded from an investor's international equities allocation. The investment process and return series to date provide a basis to our view, that the fund can provide diversification benefits," the firm said.
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