The careful selection of different Indian stock funds allows investors to enter the Indian market at a steep discount to US price multiples, even though the Indian market as a whole is trading at higher multiples than the S&P 500. Combining these low stock valuations with a cheap currency creates a bargain buying opportunity for value investors.
Why India?
India's cheap currency makes assets denominated in its currency cheap. Moreover, it scores better than Russia and China (The R and C in BRIC) for investor freedom. I will walk you through how I came to these conclusions.
To examine the investment prospects of different foreign markets, different markets were screened for discounts to Purchasing Power Parity (PPP) of their currencies versus the dollar. India currently has one of the cheapest currencies according to PPP, which is trading near a 60% discount to parity. From a top-down perspective, this is
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