Ravi Jain, Ph.D., CFA, is a Portfolio Manager of the Large Cap Growth Strategy at Ironwood Investment Management. Dr. Jain currently serves as an associate professor of finance at the University of Massachusetts Lowell, where he teaches undergraduate and graduate courses in finance. He seeks to invest in companies that can compound their earnings through wise capital allocation, with emphasis on firms — both parents and subsidiaries — emerging from spinoffs. Preferred businesses are permanent in nature, generate high return on capital, have the potential to reinvest earnings and have good management. In his exclusive interview with the Wall Street Transcript, Dr. Jain discusses his investment philosophy and where it takes his portfolio.
“The rationale for adding positions, which are exposed to the growth in India, is because I understand that market very well, and I think India will be a fast-growing economy for a long period of time. It is a consumer-led economy unlike other emerging markets which have largely been export-oriented stories. India will be a consumption story, and whenever there is a consumption story across the world, companies with long-established brands do very well. ”
“I think the Indian economy will be a consumption-led economy. Services comprise majority of the GDP, and there is a big middle class emerging in the country. Consumer stories will do very well, but other sectors like finance, infrastructure, travel, health, education and defense will also grow faster than the GDP.
For example, the domestic air travel grew 28% last month on a year-on-year basis. The per capita GDP in India is $1,700 compared to $60,000 in the U.S. As that per capita GDP increases, the incremental dollars will be available to be spent on health care, education, travel, financial services, and other basic and discretionary needs.“
For the complete detail on which publicly traded companies are best positioned to take advantage of this growth, read the entire interview with Dr. Ravi Jain in the Wall Street Transcript.