India considers setting up a sovereign fund
Meanwhile, in New Delhi… India’s pondering what to do with its own cash. Whilst China’s sovereign funds are active all around the globe (even if it remains hard to trace exactly where), India’s reserves, the seventh biggest in the world, are parked in low yielding (US and EU) securities. It makes sense for New Delhi to diversify away from what has been seen less of a sound investment recently.
But were India to set up a sovereign fund, and set it free to invest where it pleases it, where would it put its money? Surely part of it could be used to secure strategic resources, like foreign oil and minerals. It’s already being done at a small scale. But it could also seek higher returns in blue-chip equities like Apple, Google, or Prada. Some of this assets are now offering more safety, and better returns, than sovereign bonds.
So maybe time for India to go shopping?