Growth in India Proves Hard to Ignore
India is the world’s fastest-growing major economy, and Toronto Mayor John Tory is looking to deepen ties with the nation on a 10-day trade mission.
The primary purpose of the trip is to lure jobs to Toronto and also promote business ventures between Canadian firms and South Asian companies, with a specific focus on education, finance and technology. One such company which is already set on this path is Paytm, India’s largest mobile payment services platform. Paytm is one of the primary benefactors of the recently implemented demonetization program by the Indian government, and an integral player in the administration’s overall push towards a digital economy. The firm has an office on Adelaide Street West in Toronto.1
Commenting on the synergies that he sees between India and Canada, Paytm Chief Executive, Harinder Takhar, pointed out that, “India is going through the revolution that Google and other [tech] companies brought about in North America 15 years ago, [and] Toronto is such a high-tech place, with so much talent… We need to tell people that this exists because opportunities for Toronto [and India] are unbelievable.” 2
In the first few days of his trip, John Tory visited the Paytm headquarters in New Delhi, and also delivered a keynote speech at the Observer Research Foundation, which is an economic think tank in India.
What Does It All Mean for Canadian Investors?
Initiatives such as John Tory’s trade mission are proof that India is ripe with opportunity in sectors such as tech, banking and infrastructure. While most Canadians cannot invest in companies like Paytm or directly into infrastructure deals in India, they can access the growth that India has to offer through actively managed mutual funds.
“More and more we are seeing major Canadian institutions and leaders like John Tory take an interest in India as they seek to tap into the remarkable growth that the country has to offer” notes Bhim D. Asdhir, President and CEO of Excel Funds Management Inc. “Through our partnership with Birla Sun Life [Asset Management Company Limited], we are proud to offer products that provide Canadians with direct access to the Indian market.”
One such product is the Excel India Fund, which is the largest and longest-running India-focused mutual fund in Canada. Mr. Asdhir says that the fund gains an advantage over other passively managed strategies by investing in companies that trade outside the major index and has an 18-year track record of outperforming the benchmark.3
“We’ve found that active management tends to beat passive investing in India,” says Mr. Asdhir. “Unlike a passive strategy, we have portfolio managers and analysts that are located on-the-ground in India and are able to perform hundreds of onsite visits, conduct manager meetings and do rigorous research before investing in a company -- this is how we are able to generate alpha over the long-term.”
The Excel India Fund is sub-advised by Birla Sun Life Asset Management Company Limited, one of India’s largest asset managers with over US$25 billion in assets under management.4 For investors looking to invest in Indian small and mid-caps or Indian bonds, they can access these markets through the Excel New India Leaders Fund and the Excel India Balanced Fund, respectively.
1 CablePulse 24, Tory Delivers Speech at Think Tank as Trade Mission to India Continues, March 16, 2017.
2 Toronto Star, Mayor John Tory to lead trade mission to India and Sri Lanka, March 2, 2017.
3 Bloomberg data, total annualized return, in CAD terms, as at February 28, 2017.
4 Birla Sun Life Asset Management Company Limited data, as at December 31, 2016.
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The information contained in this article is for informational and illustrative purposes only and is not intended to provide specific financial, investment, or other advice to you, and should not be acted or relied upon in that regard without seeking the advice of a professional. Particular investments or trading strategies should be evaluated relative to each individual