TORONTO, Feb. 8, 2017 /CNW/ - On February 1, 2017, the Indian government released its Union Budget for the fiscal year 2017-18, announcing tax and capital expenditure initiatives to further speed up the country's development, while opening the door for new investment opportunities in key sectors of the economy. Prime Minister Narendra Modi described the plan as 'futuristic', with a focus on growth, rural development and urban rejuvenation.
Highlights of the Budget included:
- A lower income tax rate of 5 percent, for middle-class citizens;
- Tax breaks for small and medium-sized enterprises (SMEs); and
- An increased infrastructure outlay of ₹3.96 trillion (US$59 billion) to build and modernize roads, airports, railways and ports.1
"Overall, we view this as a positive Budget which targets the right side of the economy in ways that will help drive consumption in India," said Bhim D. Asdhir, President and CEO of Excel Funds Management Inc. ("Excel Funds"). "We believe that the best way for investors to capitalize on the opportunities presented by the Budget is through on-the-ground access to India; and our funds provide this type of access. Furthermore, a lot of the stocks that our managers invest in are not available in the index or other passive strategies, and this is how we are able to generate alpha."
Excel Funds has long been a proponent of investing in India having launched the Excel India Fund in April, 1998. Today, the Excel India Fund is the largest and longest-running India-focused mutual fund in Canada. In addition to this offering, Excel Funds also has two unique products that provide direct access to India: the Excel New India Leaders Fund, which invests predominantly in high-quality small and mid-cap stocks, and the Excel India Balanced Fund, which is the only mutual fund in Canada that offers exposure to India's fixed-income market. Between these three products Canadian investors can gain access to the entire spectrum of the Indian market.
"India is our preferred country call within the emerging markets, and we think it's going to be the fastest-growing major economy in the world [going forward]," noted Christine Tan, Chief Investment Office with Excel Investment Counsel Inc., while speaking on BNN's Market Call. "We really liked the [Union] Budget. It's another confirmation of the strength of the [Narendra Modi] administration, as it was a good balance between fiscal constraint, while spending in very targeted ways. Our preferred plays [in India] include domestic consumption companies and we [also] like some of the banks which benefit from low levels of financial penetration, and we like some of the infrastructure companies as well." See the full BNN interview here.
With over 7,000 publicly listed companies, the Indian market is highly diversified and with strong macro fundamentals, India represents a compelling investment opportunity for Canadians that are looking to add a meaningful growth component to their portfolios.2 Sectors such as consumer discretionary, financials, materials, and industrials, are all positioned for outperformance following the Budget announcements, and corporate earnings are expected to compound at a rate of two times GDP growth (around 15 percent) over the long-term.2 Through its partnership with Birla Sun Life Asset Management Company Limited ("Birla Sun Life"), Excel Funds is able to grant Canadians access to high-growth opportunities in segments of the Indian market that have the potential to enhance capital gains. Birla Sun Life is one of the largest fund managers in India, with approximately US$26 billion in assets under management.3
To learn more about investing in India with Excel Funds click here.
About Excel Funds Management Inc.
Excel Funds Management Inc. is a multiple Lipper Fund Award winner specializing in emerging markets. Founded in 1998 with the launch of the Excel India Fund, the largest and longest-running India-focused mutual fund in Canada, Excel Funds has become a true leader in the emerging markets investment space by offering a wide-range of innovative investment products that capture new growth opportunities.
Leveraging a best-in-class investment team and an unrivalled network of sub-advisers, Excel Funds has access to the knowledge base of over 500 local portfolio managers and 200 analysts around the world. Its on-the-ground sub-advisers and proprietary asset allocation models contribute to the firm being recognized as "The Authority in Emerging Markets".
1 India Times, Here are the highlights of Union Budget 2017, February 1, 2017.
2 Goldman Sachs, The Asian Consumer: India Consumer Close-Up, June 1, 2016.
3 Birla Sun Life Asset Management Company Limited data, as at December 31, 2016.
SOURCE Excel Funds Management Inc.
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