5 India ETFs To Add Sparkle To Your Portfolio This Diwali

Despite slowing economic growth, increased tariff and tensions with Pakistan, India’s stock market has prospered since last Diwali. In fact, the BSE Sensex gained nearly 11% over the past year while the National Stock Exchange index (Nifty) fetched returns of 9.5%.

These gains are definitely solid, and investors are again anticipating another banner year. This is especially true against the backdrop of the Modi-led government for the second time, which introduces several reforms including an overhaul of the tax system, corporate tax cuts and implementation of new bankruptcy law. Additionally, easing of monetary policies are pushing the stocks higher. With regard to this, the Reserve Bank of India slashed interest rates for the fourth time this year to stimulate the slowest growth in Asia’s third-largest economy in nearly five years.

Further, the optimism and fervor surrounding the festival of Diwali and the old belief of Muhurat trading are attracting capital inflows to the country. Muhurat trading is the auspicious stock market trading for an hour on the day of Diwali that according to Hindu belief protects individuals from evil and brings prosperity throughout the year. It has been followed for more than half a century now.

Historically, the equity indices have delivered positive returns in these special trading sessions, though trading volume is usually very low and fewer stocks move during that short duration. BSE Sensex have moved up in 11 out of last 14 Muhurat trading sessions.

Ahead of this Diwali, which falls on Oct 27, the major Indian benchmarks are already up more than 1% this month. Several India ETFs are poised to surge in the coming days on the festive mood and religious customs.

Below we have highlighted five funds that will brighten investors’ portfolios with enhanced returns. These products have generated excellent returns over the trailing one-year period and have a solid Zacks ETF Rank #3 (Hold), suggesting more room for upside in the months to come.

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