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5 Reasons Why You Should Invest In This Emerging Powerhouse
By: StreetAuthority   Wednesday, October 19, 2011 2:35 PM
Symbols: CIA, HDB, IBN, MORN
The big driver: other emerging markets. Exports to Africa and Latin America are on track to double in the current fiscal year.

Investing in India typically means choosing the right mutual fund, because the country's largest corporations tend to avoid U.S. listings through American Depositary receipts. Fund choices include:
  • PowerShares India (NYSE: PIN) -- this fund tracks the performance of India's Indus index.
  • WisdomTree India Earnings (NYSE: EPI)
  • The aforementioned India Fund. After rising, falling and then rising at least 60% in 2007, 2008 and 2009, Morningstar notes that "this is not a fund for the faint of heart, but long-term investors should expect strong returns." And long-term returns won't be eaten up by overpriced fund managers: The fund's 1.32% total expense ratio is "among the lowest of all Asian equity closed-end funds. We believe investors are paying a fair amount to gain access to the Indian equity market via this experienced team," add the Morningstar analysts.

Risks to Consider: This is a highly volatile market with loads of potential that could easily fall further in the near-term if growth slows or inflation fails to cool. Investing in India is most suitable for long-term investors.

Action to Take --> One of the defining factors of the current global stock market climate is that emerging markets are getting hit even harder than more mature economies. Yet it's the emerging markets -- like India -- that appear best-positioned to post strong long-term growth rates. With Indian stocks off 40% in the past 11 months, this looks like a great time to establish a position in one of the key India funds.

-- David Sterman

Disclosure: Neither David Sterman nor StreetAuthority, LLC hold positions in any securities mentioned in this article.

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