204. Why India is the world’s most exciting growth story for the next decade

Mike Sell, manager of the Alquity Indian Subcontinent fund, explains why favourable demographics, increasing urbanisation and a thriving private sector have made India one of the most compelling growth stories for investors over the next 10 years. Mike also explains why India’s domestic growth story makes the country an ideal investment diversifier and why he sees great opportunities in the financials sector. He also discusses the impact of Prime Minister Narendra Modi as a catalyst for growth and why investors should not be put off by the market looking expensive relative to its peers. Mike also runs through the role of sustainability in the portfolio and the moves India is making towards renewable energy.
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The Alquity Indian Subcontinent fund is a unique offering as its domestic focus often sees the team look past the larger companies in the index and invest in businesses which tend to be overlooked. With a high conviction approach, the fund is not for the faint hearted, but the team are exceptional at what they do and the long-term tailwinds surrounding demographics, urbanisation, political stability and a shift towards a formal, organised economy, support the case for long-term growth.

What’s covered in this episode:

  • How favourable demographics, urbanisation and a thriving private sector are driving the exponential growth of the Indian economy
  • How a rising middle class and a mismatch between supply and demand is boosting business for firms like Lemon Tree Hotels
  • Why the domestic growth story gives India such a strong advantage over its peers
  • Why the team sees real value in banks as a “mispriced opportunity in the portfolio”
  • How the uncorrelated nature of Indian equities is driving dedicated exposure from investors
  • Why the premium you pay for Indian equities is justified and should not deter investors targeting long-term growth
  • Why oil prices are the biggest concern to the Indian economy and the move to renewable energy to counteract this threat
  • How the role of Prime Minister Narendra Modi, as a reformist, has bolstered the economy and the benefits of his tenure being extended
  • The importance of sustainability in the investment process
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