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| By Michael A. Robinson |
When it comes to the new “space race,” battle for supremacy is kicking into high gear.
And one controversial country just took a great leap forward into a commanding — if temporary — lead.
Last month, China completed a historic lunar mission, one that was the first in history to return samples from the far side of the moon.
It was a “major event for scientists worldwide” and “a cause for celebration for all humanity,” according to geologists in China.
But it was also the latest demonstration of China’s growing space ambitions and capabilities.
Given the money being put into its space program — and China’s status as the world’s second-largest economy — you might be tempted to focus some of your investment capital here.
But hold on a minute. Because behind the scenes, there’s turmoil abroad. In fact, I’ll reveal a savvy way to “short” China with an investment that’s beating our nation’s stock market returns by more than 60%.
Dominating the Headlines
Older Americans remember when Neil Armstrong landed on the moon. It was a historic achievement and cause for headline news.
These days, though, when it comes to space, it’s China that’s dominating the headlines.
I mentioned the country’s recent lunar mission. But China also has plans to put astronauts on the moon by 2030 and build a lunar base by 2035.
Considering these goals, it would seem as if China were an investment hot spot.
The thing is that’s not exactly the case …
An Economy in Turmoil
You see, China’s economy is struggling.
Sure, the International Monetary Fund recently upgraded the country’s gross domestic product growth forecast. But this increase is expected to be temporary. A slowdown is coming.
There are a few reasons why China’s outlook is bleak …
- The country’s stuttering post-COVID recovery has dragged on stock markets.
- A regulatory crackdown has sunk the country’s once-high-flying tech companies.
- An imploding housing market has made it tough for China to get back on its feet in a meaningful way.
These issues are why, since the end of 2019, China’s stock market is down 30%.
Meanwhile, a nearby nation’s stock market has achieved remarkable growth during that same stretch …
A nation that boasts the world’s largest population, a centuries-long democracy and an increasing number of tech-related achievements.
As a result, it’s become the perfect way to “short” China. What country am I talking about?
A Nation on the Rise
You might’ve guessed it already: It’s India!
India is already one of the world’s leading economic nations. And it’s rising fast.
In fact, the IMF recently raised GDP growth forecast to 6.8% from 6.5%, citing a rising working-age population, among other factors.
Here’s a stat that says a lot about the rise of India’s middle class. Travel is booming … in the first three months of 2024, 97 million passengers travelled through Indian airports.
Just 10 years ago, the same figure would have taken a whole year to achieve, says a recent report by Mastercard Economics Institute.
Just last week, none other than the United Nations says India just became the world’s most populous nation with 1.44 billion people compared with China’s 1.4 billion.
Here’s a chart that lays out just what we are talking about regarding the rise of India.
And as you can see in the top-right corner, the value of goods exported from India has risen dramatically over the past few decades, reaching $120 billion in 2020.
But it’s India’s focus on a fast-growing technology that could launch it into the next league of supernations …
A Push for AI Supremacy
You see, India has had a significant impact in the market for artificial intelligence.
For one thing, a number of the world’s biggest companies — Microsoft (MSFT), Alphabet (GOOGL) and Adobe (ADBE), all of whom are investing heavily in AI — are run by CEOs hailing from India.
For another, Apple (AAPL) is boosting its reliance on India, shifting production of its popular iPhone away from China and toward India.
This rise is evident in India’s recent stock performance.
Since the MSCI India Index bottomed out on March 31, 2020, it has gained 137%. The same index for China over the same period is down 22%.
Luckily for us, an investment exists that enables us to capture all of India’s present (and projected future) success …
Time to Invest in India
It’s called the WisdomTree India Earnings ETF (EPI). It’s a fund that’s been around since 2008, and it offers a broad play on the key companies that drive India’s economy forward.
The fund includes more than 400 holdings, which boast a total market cap of around $2 trillion. That makes it one of the larger ETFs covering the Asia-Pacific region.
Infosys (INFY), for example, is the second-largest IT company in India. That’s in this fund.
So is Reliance Industries, a multinational conglomerate that has interests in everything from energy to textiles to retail.
The fund also includes Tata Steel, part of the massive Tata Group. And Dr. Reddy’s (RDY), a global pharmaceutical company, is in the fund, too.
This fund is the best way to invest in India’s ascension. And while it’s achieved steady, reliable growth over the past decade, its future is bright, too.
This Fund is on the Move
In the last year, EPI has gained more than 40%. That beat the S&P 500 during that stretch by roughly 60%.
Given the dynamics of India’s economic growth, this isn’t merely a way to short China …
It’s an excellent investment that you can count on for the long haul to build wealth consistently.
Best,
Michael A. Robinson
P.S. As China continues to make strides in space and India in AI, they’ll need partners … whether they want them or not. These tech-heavy industries rely on expertise.
Even the biggest companies in tech ask for help. In fact, Nvidia is amassing “silent partners” right now. Check out this full story here.
