New York: In a historic shift, Wall Street giants are redirecting their investment focus from China to India, with billions of dollars being pulled out of the former. Industry heavyweights such as Goldman Sachs Group and Morgan Stanley are endorsing India as the primary investment destination for the next decade, marking a monumental move in the global investment landscape.
Investment Landscape Transformation: Marshall Wace, a $62 billion hedge fund, has positioned India as its largest net long bet after the United States in its flagship hedge fund. Vontobel Holding AG’s arm has designated India as its top emerging-market holding, and Janus Henderson Group Plc is actively exploring acquisitions in the Indian fund market. Even traditionally conservative Japanese retail investors are embracing India while reducing exposure to China, according to a recent Bloomberg report.
“People are interested in India for several reasons – one is simply it’s not China,” remarked Vikas Pershad, Asian equities portfolio manager at M&G Investments in Singapore. “There’s a genuine long-term growth story here.”
Aniket Shah, the global head of the environment, social, and governance practice at Jefferies Group LLC., highlighted that a recent investor call about India was one of the firm’s best-attended.
“People are really trying to figure out what’s going on in India,” he stated.
India’s Appeal and Growth Story: India, under the leadership of Prime Minister Narendra Modi, has significantly expanded its infrastructure in a bid to attract global capital and divert supply lines away from Beijing. The country’s genuine long-term growth story, coupled with ongoing economic reforms, has caught the attention of global investors.
In the US exchange-traded fund market, the primary fund investing in Indian stocks witnessed record inflows in the final quarter of 2023, while the four largest China funds experienced combined outflows of almost $800 million. Active bond funds have allocated 50 cents to India for every dollar pulled from China since 2022, as per EPFR data.
“In terms of index weights, China would be lower and India bigger,” noted Mark Matthews, the Singapore-based head of Asia research at Bank Julius Baer, which launched its first-ever India fund last year. “That’s the direction.”
