Structural reforms over the last two decades have transformed India’s economy and paved the way for superior and sustained growth. Key reforms include financialisation, formalisation, digitisation, deregulation and infrastructure build out. These reforms have not only bolstered the economy but have also filtered down to Indian companies, enabling them to report some of the strongest earnings growth and equity returns among major global markets.
India’s growth wave
India’s growth potential is further enhanced by favourable demographics and a dynamic consumer landscape. Household consumption has nearly doubled in the past decade, surpassing growth in the US and China. While rural regions currently drive consumption growth, urban demand is expected to recover in the coming quarters, supported by reduced personal income tax for middle-class households and pay increases for government employees and pensioners.
The encouraging macroeconomic backdrop and structural drivers create a long runway of growth for Indian companies. Coupled with good management and governance put them amongst the top in the quality spectrum within the emerging markets universe, offering compelling long term opportunities for investors.
While India’s economic and corporate earnings growth are currently experiencing a mid-cycle slowdown after several years of an infrastructure-led business cycle expansion, the country’s monetary and regulatory easing measures are poised to stimulate a revival. These reforms and stimulus efforts reinforce India’s status as an attractive investment destination, providing a resilient foundation for future growth.
Being active in Indian equities
In our recently published whitepaper, we elaborated on the wide-ranging reforms across India that have encouraged greater participation in the formal economy, a higher uptake of banking services, and an increase in domestic flows to the country’s financial markets.
The Indian equity market has displayed great depth and is relatively more mature compared to others in the emerging market universe. It has been a magnet for both international and domestic flows, and we expect this interest to continue as the business cycle matures after a mid-cycle slowdown.
To put flows into context, over the three years to July 2025, Indian Equities ranked sixth among all Morningstar Equity Categories for inflows and outpaced every other emerging markets. Within these flows, 37% was into Indian equity ETFs, of which the entire market is passive.
The growing dynamism of the Indian market offers good breadth and dispersion for investors but navigating it requires in-depth research to find the right opportunities and identify companies best positioned to benefit from the structural shifts. Active managers with robust research capabilities are well suited to capitalise on these growth drivers that are not always fully captured by passive strategies.
Moreover, the sustained enthusiasm for Indian stocks and expectation of reviving growth have kept valuations elevated. While we believe the number of compelling investment opportunities remain plentiful, it takes an active approach to navigate these high multiples to find companies that have strong growth trajectories at reasonable prices.
JPM India Research Enhanced Index Equity Active UCITS ETF
This is where the JPM India Research Enhanced Index Equity Active UCITS ETF (JRIN*) comes into play, combining the best of active and passive management to provide investors with targeted exposure to companies best positioned to benefit from India’s growth story. The JRIN* ETF is the first active Indian equity ETF launched in the UCITS market.
The fund leverages the time-tested Research Enhanced Index (REI) approach, which applies the stock-specific insights of J.P. Morgan Asset Management’s fundamental research analysts while maintaining index-like characteristics through robust risk management. We believe the REI process is particularly well-suited for Indian equities, as JRIN* provides diversified exposure to the Indian stock market, while minimising sector and style risk and maximising stock-specific risk.
J.P. Morgan Asset Management has a long history of managing Research Enhanced Index strategies, spanning over three decades and a variety of regions including the US, Europe, Emerging Markets and Japan. The process allows investors to capitalise on locally-based stock research and active stock picking to uncover attractive alpha opportunities in the stock market.
JRIN* benefits from low tracking error market exposure and a cost-efficient investment approach. The fund managers aim for a tracking error of between 1.0% and 2.0% against the MSCI India 10/40 Index. The TER of 40 basis points means the fund offers cost efficient access to an active approach to the Indian market. JRIN* is classified as Article 8 under the SFDR regulation, due to its exclusion of controversial industries and integration of ESG factors throughout the investment process.
Investors should be aware that the Indian capital gains tax (CGT) is a significant factor, and not all fund managers accrue it on a daily basis. Similarly, MSCI does not factor in the accrual of CGT in its index returns. This treatment of Indian CGT can impact performance, and investors should consider this in their decision-making process. Daily accrual provides investors transparency regarding performance.