India is having a big moment as some forecasters predict its GDP will double by 2031, and the World Economic Forum says it could become the world’s third-largest economy in the next five years.
Demographics are playing a huge factor: India is a young, growing country with the working-age population expected to increase by 100 million over the next decade. In this episode of Buckingham Perspectives, Chief Investment Officer Kevin Grogan discusses whether investors can take advantage of these trends by investing more in stocks of Indian companies. Although we believe it makes sense to invest in India as part of a diversified emerging markets allocation, academic evidence shows the potential for future economic growth is not reason enough to overweight any country, including India.
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Sources: Morgan Stanley. India’s Impending Economic Boom. Nov. 8, 2022. World Economic Forum. “India could become the world’s 3rd largest economy in the next 5 years. Here’s how.” Jan. 15, 2024. Jay R. Ritter, University of Florida. Is Economic Growth Good for Investors? Aug. 7, 2012.
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