With a cynical view of India, global investors had bet big on Chinese equities. Now, decades later, the MSCI China Index has delivered no returns, but the MSCI India Index has gained a whopping 2,000 percent
No candid investor will flinch while confessing the hype around China at most fundraising roadshows. For decades, global investors have fancied China over India for big-ticket investments and the lure of higher returns. That notion may bite the dust given the stark underperformance of China stocks.
Saurabh Mukherjea, founder and CIO, Marcellus Investment Managers, says the portfolio allocation of most global family houses and endowment funds towards Chinese stock markets is four-five times that of India, although returns from China have been dismal over the past decade in relation to India.
“In New York or London, you will not hear a word about the Indian stock market. Most investors, for decades, have had a cynical view of India. They had this wildly bizarrely positive notion about China, which is neither founded on fact, nor on investment returns. I think that anomaly has begun to correct,†Mukherjea adds.
Interestingly, since its inception nearly thirty years ago, the MSCI China Index has delivered no returns to investors. In contrast, the MSCI India Index returned a whopping 2000 percent and the MSCI Emerging Market Index rose over 160 percent.