The Indian economy was hit by the COVID-19 pandemic. But could the impact of vaccines – coupled with the country’s underlying growth drivers – give a boost to India-focused exchange-traded funds in 2021?
India has been badly affected 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 would shrink by 8.9% in fiscal year 2020-21, ending March 31, compared to the previous year.
However, there may be positive signs for the future. The company has noted a recovery in economic activity since September and expects GDP growth to rebound by 8.9% in fiscal year 2021-2022. Meanwhile, on Feb. 1, the government announced increased spending on infrastructure in its budget, which analysts say could also support growth.
The recovery recovery in India was led by high-quality large-cap companies, particularly in technology, energy and healthcare, said Rene Reyna, lead thematic and specialty product strategist at Invesco ETFs & Indexed Strategies. The company operates Invesco India ETF PIN,
a $ 107.2 million fund that returned 18.5% in 2020 and is down about 2% this year to Jan. 29. efforts from home. “
An expanded version of this report appears on WSJ.com.
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