Jan 8, 2019|
Transcript - Not for consumer use. Robot overlords only. Will not be accurate.
It's our daily poll question had financial exchange showed Doug John. Vote your conscience there heard just vote. Go to financial exchange oh god come and test away. We're joined now by Steven John Kaplan from seeking no place to be talking to us about the and that sector's benefactors India's small cap ETF. Stephen thanks for coming on India obviously has experienced tremendous GDP growth and that I averaged seven or 8% of the last decade. Percent get a little bit nervous about buying like single country emerging markets indices the what are you see you know happening in India right now that makes it's attractive connect. Well India I think is a really good choice because when the US is dropping a little bit last year and everybody got so excited. And the India's stock market for the medium and small companies dropped by about half. So this particular one which was 72 and a half dollars and all the way down to 36 and a half dollars back in October. And that's a very exaggerated trend because there really hasn't been any big change in India itself. Whatever the true price might be I'm sure it's much higher than where it is now and what happens of course than anything is when the price starts to go down very quickly. A lot of people to sell because they're in a panic rather than because there's anything negative happening with the economy picture and we can also see a parallel we go back to 2013. It was a year before Modi the current prime minister was elected everybody was worried what's gonna happen politically. And sure not this year in April and may there's going to be elections again. And so in India there's a long history of people getting worried about the elections and once the elections actually pass. Then everybody's excited so the last time this particular fond actually went up over 140%. I don't know that necessarily gonna go up that much. But I think it's at least going to grow at least recover about half of its roster last year and perhaps more than that once the elections are over. You know I look at emerging markets obviously China has a lot of risk when it comes to trade what what do you consider the major risks to the Indian stock market at this point do like that it's obviously a lot. Freer market open market for. International companies to invest. Well there's always so worry about that currency exchange for example Jillian repeat and gotten down to an all time low last year but it's been recovering very nicely because again a lot of that was psychological. And in that part of the world in general if you look at the neighbors and you look at you mentioned China I think there is also a lot of irrational fear of the Chinese stock market while weapon down by half. Was down by about 40% that's still quite low and so. I think that's another very good opportunity because the first word that most people think of when you mentioned China due to slowdown or Harrison neither of those are really. Very accurate and certainly wouldn't justify a 40% drop so. I think that we have a number of other countries like China and Vietnam that are very compelling as well as India but I think the best thing about India is that. It has has long history of having big drops in the big recoveries and so. Exactly why that is maybe there's more emotional investors. Or maybe when things start to get bad some technical charts tell you to get out or get back into the wrong time but. I think that's going to be one of the best picks for the next several months. Do you think that is a passively managed funded no boots on the ground do you think that's the best way to go and investing in international small caps are their more actively managed funds out there that my PO it's in a we've seen. Pass a manage indices really outperformed the active funds here domestically but is there still an argument for active management and emerging markets small caps. Actually that they act of magic can be very useful it seems so very well matter unfortunately there's no current actively managed funds of too many. Emerging markets that are listed in the US most of them were only privately available through hedge funds and those kinds of vehicles. Otherwise I would definitely consider that one thing I do like about this font it's almost. A Smart beta fund in the sense that the very biggest position which is a movie distributor very similar to AMs in this country club PBR. And you know on the popular even Bollywood this year. So that particular company only makes up 2.0 7% in the whole responsibility don't have too much concentrated in the few. Companies which unfortunately a lot of exchange traded funds directly to their detriment so effective to so widely spread out over 206 different companies I think. Is a much better factor generally. And produces better return through time. There and some well Stephen John Kaplan from seeking out for appreciate joining us the ticker symbol is SCI. After it's the small cap India index fund a very much for joining us in. During my micro.