Most Canadian investors will venture outside of Canada, convinced owning some of the top U.S. companies is worth taking currency risk. But many don’t go any further, believing the rest of the world is a dangerous place to invest.
This may be true, but other nations can give great opportunities.
Take India as an example. The world’s second most populous country is poised to make investors a lot of money over the next few decades.
India’s GDP is projected to grow at more than 7% in 2016, and maintain that growth through 2020. The world bank predicts India’s economy could be the world’s third-largest in a decade.
Prime Minister Narenda Modi has promised to cut down on government corruption, a key anchor on growth. And the country’s middle class is projected to hit 200 million by 2021, versus approximately 50 million today.
There’s an easy way Canadians can get exposure to the growing Indian economy. They can invest in the BMO India Equity Index ETF (TSX:ZID).
It’s a fairly concentrated ETF, holding just 16 positions. The largest holding is Reliance Industries, with 15.4% of assets. Approximately 36% of the fund is invested in financials. Information technology is the second-heaviest weighting, coming in at 18.9% of assets. All holdings trade on major exchanges like the New York or London stock exchanges.
The ETF has a 0.72% maximum management-expense ratio, which is pretty high versus other ETFs, but is quite low when compared to a similar mutual fund. It also offers decent liquidity for a retail investor, with more than 15,000 shares traded daily.
