India’s economy suffered a severe blow from the COVID-19 pandemic. But could the impact of vaccines, combined with the country’s underlying growth engines, boost India-oriented exchange traded funds in 2021?
India has been hit hard by the pandemic, with more than 10 million cases. Its economy suffered in 2020; in a January 2021 note, IHS Markit estimated that gross domestic product for fiscal year 2020-21, which ends March 31, would contract by 8.9% compared to the previous year.
However, there may be positive signs for the future. The company notes a rise in economic activity since September and expects GDP growth to fall by 8.9% in fiscal year 2021-22. Meanwhile, on February 1, the government announced an increase in infrastructure spending in its budget, which analysts believe could also support growth.
India’s recovery concentration was led by high-capitalization high-quality companies, especially those in technology, energy and healthcare, says Rene Reyna, thematic and special products strategist at Invesco ETFs & Indexed Strategies. The firm operates the PIN ETF of Invesco India,
a $ 107.2 million fund that earned returns of 18.5% in 2020 and fell about 2% so far this year, through Jan. 29. efforts from home “.
An expanded version of this report appears on WSJ.com.
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