By David Nadel
In 1492, Italian explorer Christopher Columbus set sail to discover India. He missed his mark, however, landing in America instead. The rest, as they say, is history—with the exception that more than 500 years later India is still worthy of discovery for many Western investors.
An Introduction to India
In 1492, Italian explorer Christopher Columbus set sail to discover India. He missed his mark, however, landing in America instead. The rest, as they say, is history—with the exception that more than 500 years later India is still worthy of discovery for many Western investors.
India is the world’s largest democracy and Asia’s third-largest economy. With its rapidly growing middle class, India is also the world’s third-largest economy measured by purchasing power parity, and with a median age of just 25 years old, it will also soon have a fifth of the world’s working-age population.1 India’s median age is 10 years younger than the U.S.’s and nine years younger than China’s.2 This demographic dividend sets the stage for growth.
Gross Domestic Product, 2012 by Purchasing Power Parity (trillions of international dollars)3
My Royce colleague George Wyper and I recently visited the country to meet with 14 local companies to try and unearth some promising investments. This was our second visit together in three years, and my third in total. Investors' attitudes toward India tend to alternate between extremes of worship and despair. We think a calmer middle ground is warranted for this market (any many others.
As of December 31, 2013, India is the fifth largest country allocation of the Royce International Smaller-Companies Fund (click for a prospectus). Let's discover why we are somewhat more bullish than most.
