Let's compare the demographics of two countries - India and Japan.
India’s economy is currently growing at 7% (New Delhi targets growth of 8% p.a. growth for the next decade). While it sounds like a lot, it is apparently the minimum needed to create jobs for the 1 million people entering the workforce every month. Nearly 2/3rds of India’s 1.3 billion population are under 35 years old. This rising demographic bulge will over time create the world's largest working age population.
Let's compare this to Japan which has been stuck in a growth black hole for 20 years. It currently has 15 million male workers in the 25-44 age group, which is the lowest level of young workers for 48 years. At the other end of the demographic scale those aged 65 and above make up a record 11% (or 7.3 million) of the Japanese workforce. With low interest rates many can't afford to retire. The bulge in Japan's population is getting old and also living longer (Japan's 50,000+ centenarians are the highest proportion in the world).
India's issue is to create enough jobs for their young workers. Japan's issue is a shortage of young workers to pay for the healthcare and retirement needs of their aging population. From a purely economic perspective, India's problem is much a better one to have.
Our World Equity Fund is invested in India (and is overweight compared to the market benchmark MSCI ACWI). India's long term growth story is compelling, and demographics are a large part of this. Of course it is not all straight forward, India is held back by a range of regulatory and infrastructure issues that need solving.
(statistics in this post were sourced from MacroStrategy Partnership)