Hop Aboard the Indian Express Train
07/26/2007 12:00 am EST
Martin Weiss, editor of Safe Money Report, says the Indian stock market will continue to be a big winner and he recommends a vehicle for investing in it.
There's another mega-emerging market with just as much potential [as China and Brazil]. We've been watching for a good chance to buy and now, it's time to get aboard this South Asian juggernaut: India!
India has the world's second largest population, right after China, with over a billion people who are rapidly moving into the urban areas and becoming an integral part of the global economy. As a former British colony, India has a large English-speaking population and a tradition of democratic values.
India's fine universities produce hundreds of thousands of trained professionals in many fields-technology, medicine, engineering, architecture, and more. Bangalore, home to six million people, is rapidly becoming another Silicon Valley.
Thanks to the tremendous investment opportunities unfolding there, foreign capital is pouring into India and driving the local markets higher. We've seen this before in China and Brazil.
Just recently, India's currency, the rupee, rose to its highest level in nine years. International investors have already bought more Indian shares this year than they did in all of 2006. The benchmark Sensex Index is trading at all-time highs.
How can you get aboard this express train? It used to be difficult for Americans. There were a few mutual funds that invested in India, but they tended to have high fees and irritating trading restrictions. Now, it's a whole lot easier thanks to Barclays Bank PLC. That's because the firm recently created a new exchange traded vehicle, iPath MSCI India Index ETN (NYSE: INP).
What's an ETN, you might ask? It stands for "Exchange Traded Note." An ETN looks and acts almost exactly like an ETF, but is technically a type of bond. What matters to investors like you is that the INP tracks the MSCI India Index, with holdings in the top names of the India stock market. They include companies like software innovator Infosys Technologies (NASDAQ: INFY), energy giant Reliance Industries, Financial powerhouse ICICI Bank Ltd. (NYSE: IBN), fast-growing Satyam Computer Services (NYSE: SAY), and industrial conglomerate Larsen & Toubro.
With INP, you get a fund that tracks the performance of these companies, plus several dozen more-69 hot India stocks in all!
The MSCI India Index is up 25% so far this year, and has averaged 43% annually over the last five years. We believe there's plenty of room for more growth, so you should grab a position in INP while you can still get in at a bargain price.
We're still bearish on the US stock market, but as of now, we think there's a lot more upside in INP. (The ETNs closed above $64 Wednesday-Editor.)