Mumbai, India – With a promising outlook, Indian equities are attracting attention for their potential growth opportunities. The youthful population and strong relationships with Western democracies position India to potentially overshadow China as a global growth engine.

Investors looking to gain exposure to the Indian equities market have often turned to ETFs like the Franklin FTSE India ETF (FLIN) as a convenient option. Comparing FLIN against the iShares MSCI India ETF (INDA), historical data suggests that FLIN has outperformed INDA, thanks to its composition that includes a higher number of mid-cap Indian companies experiencing growth fueled by foreign capital.

Despite concerns of potentially excessive valuations, with the MSCI India Index trading at a forward P/E of 23x, the momentum remains in favor of FLIN as it continues to outperform INDA in the smaller-cap segment. With a low expense ratio of 0.19%, FLIN presents itself as a competitive choice for investors bullish on Indian equities.

The Franklin FTSE India ETF offers investors access to a mix of large- and mid-sized companies in India, with a focus on the FTSE India Capped Index, which measures the performance of such stocks based on market capitalizations. With $1.3 billion in assets, FLIN stands out as one of the larger ETFs targeting the Indian market.

Portfolio holdings of FLIN consist of 230 companies with a weighted average market capitalization of $57.6 billion, trading at a trailing P/E ratio of 28.2x and 4.5x P/B. The ETF’s sector allocation includes significant weights in Financials, Consumer Discretionary, Technology, Energy, and Industrials sectors.

In terms of historical returns, FLIN has shown a strong performance, outperforming its peers in the India Equity category. The ETF’s 3-year total return of 34.8% has surpassed that of INDA and the SPDR S&P 500 Trust ETF. The success of FLIN can be attributed to its focus on smaller companies that have contributed to its overall performance.

Despite political shifts and macroeconomic considerations, Indian equities continue to show promise. The recent national elections and potential policy changes under a coalition government could impact market dynamics. Valuations remain a concern, with Indian equity prices nearing historical peaks, signaling a need for cautious investment strategies.

While the technical indicators continue to support the momentum of Indian equities, investors should monitor the performance of FLIN against INDA for early warning signs of a market correction. In conclusion, the FLIN ETF presents a compelling option for those seeking exposure to the Indian equities market, with its focus on mid-cap companies and strong historical performance.