Veteran emerging markets investor Mark Mobius has expressed a highly optimistic outlook for India, predicting robust double-digit returns and revealing a significant allocation of his personal portfolio to the country. In a recent interview, Mobius outlined his confidence in India's economic trajectory while advising caution due to global headwinds.
Bullish Stance on India Amid Global Uncertainty
Mark Mobius stated that nearly 30% of his investment portfolio is currently dedicated to Indian assets. He anticipates gains in the range of 12% to 15% from the Indian market. This bullish perspective comes despite what he describes as a pronounced sense of uncertainty emanating from the United States, which he believes necessitates a cautious approach for investors worldwide.
"The outlook looks quite uncertain, particularly because uncertainty in the US is pronounced," Mobius remarked. His advice to investors is to stay invested but maintain ample liquidity. "I've been advising people not to go out of the market, but at the same time to be cautious and be ready with cash in hand," he added, emphasizing that capital preservation is now a priority.
To safeguard his own investments, Mobius disclosed that he holds about 20% of his portfolio in cash and has employed hedging strategies. "I've put a lot of hedges on my purchases. I've used put options to protect myself on the downside," he explained.
India's Growth Engine: Reforms, Demographics, and China+1
Looking ahead, Mobius is confident that India will perform very well in 2026. He credited the ongoing economic reforms under Prime Minister Narendra Modi's administration as a key driver. A critical factor for sustained growth, according to him, is easing the bottlenecks for investments entering the country.
When comparing India with China, Mobius clearly favored India's prospects. "India will probably outperform for a number of reasons," he said, citing favorable market dynamics, continued reform momentum, and a global shift in sourcing strategies—often referred to as the "China+1" policy. "Both markets are important, but India's potential for growth is greater," he asserted, pointing to stronger growth projections, demographic advantages, and supply chain realignments.
Sector Picks and Investment Strategy
Mobius shared specific insights into where he sees value within the Indian market. He expressed excitement about the retail sector, particularly the transformation driven by online shopping, delivery systems, and widespread technology adoption.
He is also bullish on manufacturing, with a special focus on computer hardware. "I’m bullish on India becoming a major supplier of computer hardware. Apple sourcing from India is just the beginning," Mobius noted. Additionally, he flagged chip software development as an overlooked area with significant potential, given the extensive coding work already being done in India for global firms.
Interestingly, despite his strong interest, Mobius said he avoids Indian initial public offerings (IPOs). His portfolio focuses on companies that extensively use technology rather than those solely developing it.
Views on Gold, US Stocks, and Currencies
On other asset classes, Mobius shared his tempered view on gold, expecting it to remain range-bound without significant upside. Regarding the US market, he warned that the rally in artificial intelligence (AI)-related stocks may have gone "a bit too far," drawing parallels to previous technology booms.
He expects the US Federal Reserve to move towards an easier monetary policy next year. On currencies, he predicted the US dollar would remain stable—neither strengthening nor weakening significantly—and that falling interest rates should push bond yields down, benefiting holders of existing higher-interest bonds.
In summary, Mark Mobius presents a compelling case for India as a standout investment destination in the emerging markets universe, backed by structural reforms and favorable demographics, while advocating for a prudent, hedge-protected investment approach in the current global climate.
