(Pictured: Todd McClone)
India will offer the best emerging market opportunities, and perhaps some of the better global investing outcomes overall, over the next five years according to Todd McClone, portfolio manager of William Blair’s $US1.4 billion emerging markets leaders strategy.
India is one of the few winners from the current drop in the oil price as it is a big oil importer and after a year of dreadful growth, India’s recovery is starting to pick up, helped by the efforts of new Prime Minister Narenda Modi.
“I think you’re in a multi-year up cycle for India,” McClone said.
Modi’s majority is the first simple majority since 1984, and that will make it a more effective government when it comes to passing legislation for reforms.
Modi is focusing on taxation reform, such as the countrywide GST to improve taxation collection from the current system of statewide VATs .
“It’s a market that I think emerging market investors want to be overweight because corporate India is a very impressive from a quality point of view,” McClone said.
William Blair is currently 12 per cent overweight India and has a 19.5 per cent allocation to the country in its emerging market leaders portfolio. That allocation has increased by 9.3 per cent over the past 12 months as a 23.8 percentage allocation to China has been cut by 1.5 per cent over same period.
“You’ve just started to see the retail investors come back to their own market [in India]. So you’re seeing a big vote of confidence locally,” McClone said.
Head of Australia and New Zealand institutional distribution, Alex Francois, joined the group two years ago and has been introducing William Blair’s capabilities to the local market.
McClone, who is based in London, was in town last week doing the rounds of asset consultants and researchers.