India beats China as most attractive emerging market

The finding is part of Invesco’s 11th annual edition on sovereign investors titled ‘Invesco Global Sovereign Asset Management Study’.

“India exemplifies the attributes sought by sovereign investors,” said Terry Pan, Invesco’s chief executive officer for Greater China, Southeast Asia and South Korea. Pan is the author of the report.

The investment firm interviewed a combination of 142 chief investment officers (CIOs), heads of asset classes, and senior portfolio strategists from 85 sovereign wealth funds and 57 central banks. These institutions cumulatively manage approximately $21 trillion in assets.

The study observed an increased affinity for fixed-income assets, including private debt, and heightened interest in Emerging Markets with solid demographics, political stability, and proactive regulations as prime investment destinations in an era of persistent inflation and high real interest rates.

“We don’t have enough exposure to India or China,” the report said, quoting a Middle Eastern development sovereign fund. “However, India is a better story now in terms of business and political stability. Demographics are growing fast, and they also have interesting companies, good regulation initiatives, and a very friendly environment for sovereign investors.”