A.T. Financial Newsletter
world's largest steel company, are also making their mark.

A large English-speaking population
Another big India attraction is that its business community, political class, and educated elite generally speak English. This makes it far easier for Western businesses to seek out new investments there and to partner with local firms. The world's largest democracy also has a long common law tradition, and solid institutions ranging from a free press to well-regarded universities.

One worry in recent years has been India's inflation rate. At more than 8% in 2013,2 it is creeping up to unsustainable levels. However, even there, India fares well relative to Western economies, particularly Japan and Europe, which have been fighting deflation, widely regarded as a far more serious threat.

Spicing up your portfolio
As with any emerging market, fund investors need to be prepared for volatility when investing in India funds. Still, as a modest portion of a diversified portfolio, they offer significant growth potential to boost overall returns as well as valuable currency, geographic, and industry sector diversification.

If you'd like to explore India in more detail, give us a call. We can help you select funds that are appropriate for you based on your investment objectives and risk tolerance level.
1bseindia.com/indices
2The Economist, The World in 2013
MUTUAL FUNDS
Craving Indian? Let's talk.
India's economic outlook improved significantly this year after the country gave reformer Narendra Modi a stunning electoral majority. India's benchmark BSE Sensex index climbed steadily in the months after the results were announced and reached a record high on September 8, 2014.

Investors are hoping that Modi, who built up an impressive track record running the north-western state of Gujarat, will have similar success in streamlining the various bureaucracies, interest groups and regulations which have long stunted the country's progress.

India has several qualities that can make it attractive for mutual fund investors looking to spice up portfolio returns.

Growth potential
At 1.24 billion and growing, India's population is about 35 times larger than Canada's. That's important because population growth is one of the key drivers of business sales and profits. Almost all of India's major sectors stand to benefit from rising consumer
demand, including infrastructure, housing, food distribution, transportation, and telecommunications.

A growing middle class
Average incomes in India are low by western standards and per-capita gross domestic product was just $1,770 in 2013.2 However, an increasingly educated and affluent middle class is beginning to demand the accoutrements of a Western lifestyle, creating new opportunities in the automotive, retail, and travel sectors.

World-class businesses
One of the more tangible signs of India's rise is the emergence of a number of world-class businesses. Many, such as Infosys, Wipro, and Reliance Communications are concentrated in high-value sectors such as mobile technology, computer programming, software support, and business process outsourcing. However, firms in traditional manufacturing, such as Tata Motors (which bought the Jaguar and Land Rover brands in 2008) and ArcelorMittal, the
Boost diversification
Adding India funds to your portfolio can enhance its diversification and provide you with access to more companies in sectors that are underrepresented in Canada. Information technology, for example, makes up almost 17% of India's benchmark market index, compared with less than 2% for the S&P/TSX Composite.
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