Client Associates expects overseas investors to double India allocation
Client Associates, which represents family offices and is a wealth manager for HNIs, expects overseas investors would double their allocation to India to generate higher returns from their equity portfolios.
«India will outperform all major economies for the next 10 years. Given this, global investors should double allocation to India,» says Rohit Sareen, co-founder, Client Associates.
He believes many global investors allocate based on the MSCI World Index and have an allocation between 0.5% to 3% to India.
Given India's strong position in the global economy, they should raise this tactically in the next few months to 5-6%.
Currently, India contributes about 3.61% of the global market capitalisation. A study by Client Associates points out that both current and expected GDP growth for developed large economies has been trailing their respective 10-year historical averages due to elevated interest rates globally amid supply side issues emanating from spiralling geo-political issues.
While Global output is likely to moderate to 2.1% in 2023, mainly due to geo-political crisis in Europe & West Asia and high interest rates due to restrictive monetary policies, the Indian economy is likely to grow at 6% plus in FY24 and FY25 due to structural long-term growth drivers such as domestic consumption and a young working age population.
