As MSCI Economic Exposure data exhibits, emerging markets (EM) generally had high economic exposures to companies with local revenue sources. The similar is true for India, one of the fastest-growing economies on this planet. Our evaluation, as of Jan. 31, 2024, discovered that greater than 70% of the revenues of the MSCI India Index’s constituents have been earned in India.

Revenue sources can pinpoint probably beneficiaries of rewired provide chains

A better have a look at the financial exposures of the MSCI India Index by Global Industry Classification Standard (GICS^®)¹ sectors and business teams might present insights into how the index’s geographic revenues have been distributed.

Almost 94% of the information-technology (IT) sector, composed solely of software program and providers shares and having an index weight of simply over 13%, produced its revenues internationally. The result’s that the sector had low active-return correlations with all other sectors. The largest supply of those revenues was the U.S. at 57%, adopted by Europe at 17%. More than 50% of the revenues from the health-care sector, whose index weight was simply above 5%, have been tied to worldwide sources. The remaining 9 sectors’ primary income supply was predominantly native.

A tally of financial exposures by business group indicated that software program and providers, prescription drugs, biotechnology and life sciences, with a mixed 4% index weight, earned near 70% of revenues internationally. The business group with the subsequent largest publicity to worldwide income sources (44%) was telecommunication providers and had an index weight of two.8%.

Countries, sectors and industries that mix a better proportion of worldwide revenues and a producing orientation are usually extra export-driven and are probably beneficiaries of the trend toward deglobalization. In earlier analysis, we illustrated potential methods to evaluate how industries and companies could be impacted by the rewiring of global supply chains, together with an listed method that considers thematic and structural alternatives.