Money Manager Gundlach Says Buy India. Here’s How
Jeffrey Gundlach is a big fan of India’s stock market. So are investors in exchange-traded funds.
“Buy India … and don’t look at your statement for 25 years,” DoubleLine Capital’s chief executive officer told an audience of ETF investors last week at ETF.com’s annual Inside Fixed Income conference, citing the country’s demographics. The World Bank this year predicted India would overtake China as the world’s fastest-growing major economy in the next two years, with gross domestic product growth of 7.1 percent by 2017.
Many investors at the ETF event may have patted themselves on the back, since $4.7 billion has poured into India ETFs in the past two years. That’s helped to almost triple assets over that period, to $7.2 billion. While India ETFs rank 10th in single-country ETF assets, they rank second in inflows. Only flows into Japan ETFs top them, at $14.6 billion.
Gundlach took over from Bill Gross as the most well known bond fund manager in the world.
Industrial growth dips to 4-month low in Sept
Industrial growth fell to a four-month low of 3.6 per cent in September, against the 6.2 per cent in August, because of deceleration in manufacturing and mining activities, according to official data released on Thursday.
Electricity generation, however, registered a double-digit growth.
In September 2014, industrial growth, as measured by the Index of Industrial Production (IIP), was 2.6 per cent.
The growth rose to four per cent in the first half of the current financial year against 2.9 per cent in the corresponding period of the previous financial year.
IIP growth rose to 4.6 per cent in the second quarter of the current financial year against 3.3 per cent in the first three months, which will have positive implications for the gross domestic product (GDP) numbers for July-September, to be released by the end of this month end.
India's GDP rose just seven per cent in the first quarter of the current financial year against 7.5 per cent in the previous three months.
Even as manufacturing growth was down at 2.6 per cent in September against 6.6 per cent in August, capital goods and consumer durable goods continued to register double digit growth rates.
Capital goods production rose 21.8 per cent in September against 10.6 per cent in August, showing investment activities. However, the activities were still confined to public expenditure, instead of private investment.
Consumer durables output also rose by 17 per cent in September against 10.3 per cent in the previous month. This segment is expected to perform well in October as well. It was indicated by car sales surging 21.8 per cent in October.
Ahead of festival season, firms also seemed to be storing huge quantity of furniture. Production of furniture was up 69.9 per cent in September. Its output was up 49.5 per cent in the first six months of the current financial year.
October IIP numbers, anyway, may post higher numbers because of a contraction by 2.6 per cent in the same month in 2014.
"A favorable base effect related to the shift in the festive calendar is likely to lead to a short-lived spike in IIP growth in October 2015," said Aditi Nayar, a senior economist with the cooperative bank ICRA.