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  • Christian Armbruester


For those of you who might have missed it, the Indian stock market gained 25% in 2023, and an astonishing 1500% since the start of this century. Even more impressive, all of that performance was achieved without any members of the Magnificent Seven and less than half the volatility of the Nasdaq. In the same time, India became the most populous nation on Earth and its economy is now the 5th largest in the world.

Yet, when it comes to the weighting of Indian stocks in the main benchmarks, like the MSCI World All Countries index, the allocation is less than half of the UK. Reason being, that although UK stocks have underperformed by almost 1000% during that same period, the market capitalisation of stocks listed in the FTSE100 is still higher than those in the Nifty 50 index. Clearly, this does not make sense (Chewbacca Defence).

In a world where it is all about indices, trackers, and benchmarking, should investors overweight stocks from a country that is growing at 7.7% versus, ahem, 0.2%? It is worth noting that economic growth does not necessarily equal stock market performance. China has been growing almost equally as fast, but its stock market has been flat for the last two decades.

There is also the currency, and the Indian Rupee has been weakening since, well, forever, and has more than halved in value versus the dollar since the turn of the millennium. Still, where would you rather put your money, in a country where cows are sacred or where tube drivers have been striking for 25 years and earn more than junior doctors?


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