Morningstar Magazine - December/January 2017 - 7


Letter From the Editor

On the Ground

Jerry Kerns

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To create this issue on India, we turned
to our Mumbai-based team of fund analysts
and researchers. It's the first time we've
solely relied on a team from an office outside of
Morningstar's headquarters in Chicago. It's
an understatement to say it was up to the task.
To start off our Spotlight section, analysts
Ananya Roy and Gaurav Tibude write about how
recent reforms enacted in India are confronting
a crippling bureaucracy, political gridlock,
corruption, and crony capitalism ("Revealing Its
Promise," page 35). Although progress is
being made, they advise investors not to get
caught up in the hype. Investors still need to rely
on fundamental research, not hyperbole.
Emerging markets such as India are not known
as homes to companies that score well on
environmental, social, and governance, or ESG,
metrics. But as analysts Archit Jain and
Jon Hale write, India is ahead of the game relative
to other emerging markets ("IT Firms Give India an
ESG Boost," Page 40). India businesses have
strong links to Europe and the United States,
which have higher ESG standards, but the country
also has been a leader in creating frameworks
to push companies to follow ESG principles.
The Bombay Stock Exchange, for example, was the
first exchange in Asia to join the United Nations
Sustainable Stock Exchange Initiative.

As India's fund industry grows, entrepreneurs
are racing to expand access to investing advice
and products via the Web-from young,
tech-savvy professionals to savers who live in
places not served by financial advisors. As Internet
penetration takes off, write analysts Dhaval
Kapadia and Chintan Mehta, so will automated
advice ("Robos Coming to India," Page 46).
Outside of the Spotlight section, you'll find more
coverage of India. Our incoming CEO, Kunal
Kapoor, interviews legendary Indian entrepreneur
Nandan Nilekani about India's digital revolution
(Page 33). At the Morningstar Investment
Conference in Mumbai, Morningstar's Anthony
Serhan interviewed three top leaders of
India's fund industry: Bharat Shah, Raambeo
Agrawal, and Shankar Sharma (Page 72). Finally,
Kaustubh Belapurkar profiles Sankaran Naren,
an investor who as seen firsthand India's
transformation over the past three decades into
an economic powerhouse (Page 86).
It's crucial as an editor to be able to turn
to a smart, dedicated team of analysts based
in an important overseas market. It's a
benefit of Morningstar's presence all over world,
and one we take advantage of as much as
possible to give you a global perspective. For this
issue, it's India.
Correction

An interesting aspect of India's small but growing
mutual fund industry is that active managers
routinely crush their benchmarks, even with their
high expenses. Analyst Shwetabh Sameer does
the research to find out if their outperformance
can be explained by systematic factors, and most
importantly, whether it is persistent ("Where
Active Managers Beat Their Indexes," Page 43).

In the chart on Page 39 in the October/November
issue, we incorrectly stated the factor exposure
to emerging Europe for T. Rowe Price Overseas
Stock Fund. The correct figure is 0.078.

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Table of Contents for the Digital Edition of Morningstar Magazine - December/January 2017
