When asked: "Which of the BRIC countries would you invest in?", more than a third of 804 respondents said India. Brazil was the second most popular country with 31 per cent of the vote, while China and Russia lagged behind with 15 per cent and 12 per cent respectively. Just seven per cent said they would avoid all four BRIC countries.
Weekly poll result
| Q: Which of the BRIC countries would you invest in? |
% |
| Answer | |
| Brazil |
31.34 |
| Russia |
11.57 |
| India |
34.33 |
| China |
15.42 |
| None of the above |
7.34 |
Source: Trustnet. Poll conducted 24-31 August 2010. Respondents numbered 804
A host of managers have expressed concerns about investing in India, however. A spokesman for First State's Scottish Oriental Smaller Companies investment trust told Trustnet last week that Indian equities are expensive, and the smaller 'second generation' emerging market countries offered more interesting ideas for investment. Manager Susie Rippingall avoids the country entirely in her portfolio.
Nick Timberlake, manager of the HSBC GIF BRIC Equity Fund, agrees. He said that while India's economy is in good shape, it is overpriced, adding: "The biggest underweight country in the fund's portfolio is India, which remains expensive in emerging market terms at 14.2x calendar 2011 earnings".
Even managers of India-focused funds are cautious on the region right now, despite the country today reporting economic growth of 8.8 per cent in the quarter to 30 June – growing at its fastest pace in more than two years.
Adrian Lim, senior investment manager at Aberdeen Asset Management Asia said: "We remain conservative in our investment approach [in India], focusing on well-managed businesses that have robust balance sheets, ample cash flow and sensible management with healthy regard for minority shareholders."
The MSCI India index failed to outperform the other BRIC countries over long investment periods, Financial Express data shows.
Since the MSCI launched the indices in 1998, India has trailed behind Russia and Brazil. It has also underperformed the other BRICs over a five and three year period, but looks better over a short one year time frame.
Performance of MSCI indices over 1-yr
Source: Financial Express Analytics
Intermediaries also prefer other countries to India. Andy Parsons, advice team manager at the Share Centre says Brazil is the best place to invest.
"Brazil is the most exciting BRIC by far. Investors can get exposure via infrastructure funds. That's true of all of the BRICs, but we think Brazil has the best potential there," he said.