Funds that invest in traditional emerging economies such as India and Brazil in the first quarter of the year were higher. India’s investment assets have increased with India’s strong domestic market and open policy. The Brazilian stock market has risen sharply with expectations of economic recovery. Experts advise, however, that investors need to be aware of the risks, such as the volatility of currency values and the protectionist trend.
In the first quarter of this year, India attracted the attention of the fund market. Economic openness policy and solid domestic demand were the driving forces behind India’s investment. Since the inauguration of the Indian Prime Minister Narendra Modi in May 2014, there has been a pro-market economic policy that promotes foreign investment and fosters manufacturing. In particular, the government of India has actively made economic reforms such as the introduction of the Single Taxation System (GST) that unifies the tax system, easing regulations on foreign direct investment (FDI), and currency reform. As a result, India’s gross domestic product (GDP) grew 7.2 percent in fiscal 2014 through 2015 and 7.6 percent in fiscal 2015-2016. This is well beyond China’s economic growth rate.
1.3 billion people are waving in the domestic market. Consumer spending is increasing. Consumer spending in the fourth quarter of last year was Rs. 1,778.3 billion, up 16.7 percent from Rs. Household disposable income also rose to Rs 154.965 trillion last year from Rs 138.1928 trillion in 2015. The Consumer Confidence Index also reached 136 at the end of last year, the highest level since 2010. This means that Indian consumers are optimistic about personal finances and consumption.
Brazil also attracted investor interest during the past quarter. Brazil was the region with the strongest investment growth in 2014 and 2015. But the Brazilian economy has begun to recover from last year. The original price of the Brazilian economy was boosted by the global economic recovery.
This is also reflected in key indicators. According to the Brazilian government, Brazil ‘s trade balance in March this year surged to $ 4.15 billion, surging from $ 4.56 billion in February. In particular, exports rose 29.8 percent from February’s $ 15.472 billion to $ 20.85 billion last month. Manufacturing PMI (PMI), which can measure the economic conditions of the manufacturing industry, also rose to 49.6 in March from 46.9 in February. This is the highest since January 2015. If the index exceeds 50, it can be judged that the economy is expanding.
In this situation, investments related to India and Brazil are also seen. According to the 4-day fund evaluator EFN Guide, the average return of the Indian stock-type fund after the beginning of the month was 30.7%, the highest rate in the regional funds with 11.53%. Central and South American funds, which include Brazil and other Latin American countries, also posted a 10.42% return since the beginning of the year. Brazil is the only country with a 5.95% return since the beginning of the year.
As a separate fund, ‘Samsung Small & Medium sized FOCUS securities investment trust UH [stock] _Cw’ of Samsung Asset Management, which invests in Indian stocks, has earned 15.14% return since the beginning of the year. ‘IBK India Infra Securities Investment Trust [S]’ of IBK Asset Management posted a 12.54% return. Mirae Asset India Infrastructure Sector Securities Investment Trust 1 (stock) Type A of Mirae Asset Investment Management has also earned 11.55% since the beginning of the year.