India-focused ETFs may be ready to rally

The OECD warns a second virus wave is as likely as not — here’s what that would do to the economic recovery

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India’s economy was affected by the COVID-19 pandemic. But could the impact of vaccines, combined with the underlying drivers of the country’s growth, boost India-focused exchange-traded funds in 2021? India has been hit hard by the pandemic, with more than 10 million cases. Its economy suffered in 2020; In a January 2021 note, IHS Markit estimated that gross domestic product in fiscal year 2020-21, ending March 31, would contract 8.9% compared to the previous year.

However, there could be positive signs for the future. The company has seen a rebound in economic activity since September and expects GDP growth to rebound to 8.9% in fiscal 2021-22. Meanwhile, on February 1, the government announced higher infrastructure spending in its budget, which analysts believe could also support growth. India’s rebound in recovery was led by high-quality, large-cap companies, particularly tech, energy and healthcare, says Rene Reyna, chief strategist for specialty and thematic products at Invesco ETFs & Indexed Strategies. The firm operates Invesco India ETF PIN, -0.18%, a $ 107.2 million fund that had returns of 18.5% in 2020 and is down approximately 2% year-to-date, through January 29. Reyna says India’s large information technology sector was a particular driver of the recovery, “benefiting from aggressive work-from-home efforts.” An expanded version of this report appears on Also popular on Want more stimulus control? Consider filing your tax return early. Elon Musk’s dogecoin tweet has believers asking for more.