How one active ETF is tapping into the world’s fastest-growing workforce

India: Home to 1.4 billion people, with an average age of 29 - an extraordinary demographic figure, particularly compared to the Western world's ageing population. The stage has been set for a dominant workforce and a significant consumer. 

By the end of this decade, 25% of the global workforce will be of Indian origin. Its large and growing stock market is now the fourth largest in the world (only behind the US, China and Japan) with approximately 45% of the market owned by local founders and family structures. 

These fascinating stats position the region as an unfolding growth story. But how can we, as investors, harness its potential? I sat down with Mugunthan Siva, co-founder and CIO of boutique investment firm India Avenue, and asked him to tell us more about why a group of ex-ING employees cut loose to use their combined experience and network to focus solely on India as a single investment region.

Watch the video to learn more about this emerging market and how India Avenue's new fund (CBOE: IAEF)  helps investors easily access the region. 

Please note, this interview was filmed on 8 April, 2025.

Founded in 2015, India Avenue was born from a simple but powerful idea: bring deep insight, experience, and access to one of the world’s most exciting growth markets to Australian and New Zealand investors.

“We set up our first fund in 2016… fast forward to today, we manage around $165 million and have just launched an active ETF,” says Siva.

Beyond the top 50 on the index

While many global and emerging market funds stick to the large caps, India Avenue takes a different path.

“The secret to investing in this market is actually finding some of those growth stories further down in the mid and small caps,” Siva explains.

Most fund managers focus on the top 50 stocks. But according to Siva, the real opportunity lies in the next tier, where smaller companies often grow faster than the economy and can offer outsized returns for those willing to dig deeper. 

A young and vibrant population, a dominant global workforce

One of the most compelling aspects of this region is the sheer scale and youth of the population. 

“By the end of this decade, 25% of the global workforce will be of Indian origin,” says Siva. “Even a modest increase in wealth could have a profound impact.”

This demographic wave underpins a long-term growth story that touches every sector—from consumer goods to healthcare to financial services.

A local lens as leverage

India Avenue’s investment strategy is underpinned by local expertise and relationships, something Siva believes is non-negotiable when it comes to accessing this market effectively.

“You can only get this exposure through building a strong network on the ground,” he says.

The firm has built a dual presence, with a team in Australia to tell the story to local investors, and deep connections in India that include local asset managers, brokers, regulators, and company executives. This network enables them to filter 6,000 listed companies down to a curated portfolio of around 70 names.

Managing the risks

Investing in a single emerging market does come with its own set of risks - currency volatility, political uncertainty, regulatory complexity, and corporate governance, to name a few.

But Siva argues that these risks can be mitigated through knowledge and strong local relationships.

“You really need to have a deep understanding of the business ethics… whether they want to grow the business or just fill their pockets,” he notes.

Their due diligence goes beyond financials; engaging with peers, suppliers, consumers, and employees to form a comprehensive view of each business. 

Portfolio positioning

For investors wondering where this fits into their overall strategy, Siva is clear: this is a growth-focused, long-term allocation best suited for wealth accumulation.

“It’s not really an income-producing or high-yielding asset—it’s more about capital gains,” he explains.

Given its low correlation with the Australian market and a different currency exposure, it can also offer diversification benefits to a traditional portfolio. 

For more information, visit the India Avenue fund page on their website, or on Cboe. 

India Avenue's Active ETF gives investors an easy and convenient way to harness India's growth story, with exposure to 60-80 companies listed on Indian stock exchanges, in one listed security.