India and Southeast Asia’s Market Boom: How XEQT Gives Canadian Investors Automatic Exposure

India just became the world’s 4th largest stock market by total market capitalization, overtaking Hong Kong in early 2026. Indonesia and Vietnam are posting GDP growth of 5-6% per year. The Philippines is urbanizing at a pace not seen since China in the 2000s. And if you own XEQT, you already have exposure to all of them.

I will be honest: I almost made a classic investing mistake a few months ago. I was reading about India’s booming tech sector and the massive infrastructure spending happening across Southeast Asia, and I felt that familiar itch. The one that says, “I should buy an India ETF. I should get more exposure to Indonesia. I’m missing out on the biggest growth story of the decade.”

Then I pulled up my XEQT holdings, traced the chain of underlying funds, and realized something that saved me from making an expensive, unnecessary move. XEQT already owns hundreds of Indian and Southeast Asian companies. Through its emerging markets allocation, I hold shares of Reliance Industries, Infosys, HDFC Bank, Tata Consultancy Services, Bank Central Asia, and dozens more – without ever having to research a single one of them individually.

This post is about why India and Southeast Asia matter right now, how XEQT gives you automatic exposure to these markets, and why the smartest thing a Canadian investor can do in 2026 is resist the urge to chase the boom and just stay the course.

1. Why India and Southeast Asia Matter Right Now

If you have been paying attention to global economic headlines in 2026, one theme keeps showing up: the centre of gravity in global growth is shifting south and east. This is not a vague prediction about some far-off future. It is happening right now.

India’s economy is on a tear. India’s GDP is growing at approximately 6.5-7% annually, making it the fastest-growing major economy in the world. The country surpassed the UK to become the world’s 5th largest economy by GDP in 2022, and projections from the IMF suggest it could overtake Japan and Germany within the next decade. The Indian stock market, measured by the BSE Sensex and the NSE Nifty 50, has roughly tripled in value over the past ten years. Foreign institutional investment has poured in, and domestic retail participation has exploded – India now has over 150 million demat (brokerage) accounts, up from around 40 million just five years ago.

Southeast Asia is the next frontier. Indonesia, the world’s 4th most populous country, is growing at around 5% GDP per year. Vietnam has become a manufacturing powerhouse, absorbing factory capacity that is migrating away from China. The Philippines has one of the youngest populations in Asia, with a median age of just 25. Thailand and Malaysia remain key players in electronics manufacturing and tourism.

Several forces are converging to make this moment different from previous “emerging market growth stories”:

The demographic dividend. India’s median age is 28. Indonesia’s is 30. Vietnam’s is 31. Compare that to China (39), Japan (49), or Canada (41). These countries have enormous young, working-age populations entering their peak earning and spending years. When hundreds of millions of people are simultaneously buying their first smartphone, opening their first bank account, and moving into their first apartment, the economic activity generated is staggering.

The manufacturing shift from China. The “China Plus One” strategy – maintaining Chinese operations while adding capacity in another country – has turned Vietnam, India, and Indonesia into major beneficiaries. Apple now manufactures a significant share of iPhones in India. Samsung’s largest smartphone factory is in Vietnam. This shift is creating millions of manufacturing jobs and building industrial infrastructure that will pay dividends for decades.

Digital infrastructure leapfrogging. India’s Unified Payments Interface (UPI) processed over 14 billion transactions in a single month in late 2025 – more digital payment transactions than the US and Europe combined. Indonesia and Vietnam are seeing similar leaps in digital financial services and e-commerce. These countries are adopting new technologies faster than many developed nations because they do not have legacy systems holding them back.

A growing middle class. McKinsey estimates that Asia’s middle class will reach 3.5 billion people by 2030, with India and Southeast Asia driving most of that growth. These are billions of people who will need housing, healthcare, financial services, and consumer goods. The companies serving these needs are the ones sitting inside your XEQT portfolio right now.

2. How XEQT Gives You Exposure to India and Southeast Asia

If you have read our post on XEQT’s emerging market exposure, you know that XEQT is a “fund of funds” that holds four underlying iShares ETFs. One of those is XEC – the iShares Core MSCI Emerging Markets IMI Index ETF, which makes up approximately 7% of your total XEQT allocation.

Here is how XEQT’s overall geographic allocation breaks down:

Allocations are approximate and shift over time as markets move and iShares rebalances. Check the iShares website for the most current figures.

That 7% emerging markets slice is your window into the developing world. And within it, India and Southeast Asia are playing an increasingly important role.

Here is the approximate country breakdown within XEQT’s emerging markets allocation as of mid-2026:

These weights are approximate and change as market capitalizations shift. India’s weight in particular has been rising steadily and may be higher by the time you read this.

A few things stand out from this table.

India’s share is growing fast. Just two years ago, India represented about 15-16% of the MSCI Emerging Markets Index. Today it is closer to 20%, and some analysts project it could overtake China within the next five years as the largest emerging market by index weight. XEQT captures this shift automatically – as Indian stocks grow in value relative to other emerging markets, their weight in XEC increases, and your exposure adjusts without you lifting a finger.

Southeast Asia collectively adds up. Indonesia, Thailand, Malaysia, the Philippines, and Vietnam together represent roughly 6-7% of the emerging markets allocation, or about 0.5% of your total XEQT portfolio. That might sound small in isolation, but remember: these markets are growing rapidly. As their stock markets develop and their companies grow, their weight in the index will increase organically.

You are invested across the entire growth corridor. From India’s IT services giants to Indonesia’s banking sector to Vietnam’s manufacturing exporters, your XEQT shares give you a position in the full spectrum of Asian emerging market growth.

3. The Key Companies You Own Through XEQT

When I first traced my XEQT holdings down to the individual stock level, I was genuinely surprised by the quality and diversity of the companies I owned in India and Southeast Asia. These are not small, obscure firms. Many of them are dominant players in their domestic markets with global ambitions.

Indian companies in your XEQT portfolio include:

• Reliance Industries – India’s largest company by market cap, spanning petrochemicals, retail, and Jio (India’s largest telecom operator with over 450 million subscribers).
• Infosys and Tata Consultancy Services (TCS) – Two of the world’s largest IT services companies, serving clients like JPMorgan, Walmart, and Airbus.
• HDFC Bank and ICICI Bank – India’s largest private sector banks, serving the rapidly growing middle class. HDFC Bank alone has over 90 million customers.
• Bharti Airtel – India’s second-largest telecom operator, also expanding across Africa.

Southeast Asian companies in your XEQT portfolio include:

• Bank Central Asia (BCA) – Indonesia’s largest private bank and one of the most consistently profitable financial institutions in Southeast Asia.
• Sea Limited – The Singapore-headquartered company behind Shopee (Southeast Asia’s largest e-commerce platform) and Garena (a major gaming publisher), operating across Indonesia, Vietnam, Thailand, the Philippines, and beyond.
• PTT Public Company – Thailand’s national energy company, one of the largest corporations in Southeast Asia.
• Telkom Indonesia – Indonesia’s largest telecom company, riding the wave of digital adoption across the archipelago.

These are real businesses with real revenue, serving customers in some of the world’s fastest-growing markets. And you own a piece of every single one of them through XEQT.

4. Why You Should Not Buy India or Southeast Asia ETFs Separately

Here is where I have to talk myself – and maybe you – off the ledge.

When you read about India’s growth story, the temptation is overwhelming. “XEQT only gives me 1.4% exposure to India. That is not enough. I should buy an India-specific ETF to boost my allocation.” I get it. I spent an entire weekend researching India ETFs available on Canadian brokerages – ZID, INDA, and others. I came very close to pulling the trigger.

Here is why I decided against it:

Concentration risk. When you buy a single-country ETF, you are betting that one specific country will outperform. But GDP growth does not reliably predict stock market returns. China grew at 6-10% GDP for two decades, and Chinese stocks have been a terrible investment over the past several years. India could follow the same pattern if valuations get stretched or global capital flows shift.

Higher costs. India-specific ETFs typically charge MERs of 0.50-0.75% or higher, compared to XEQT’s 0.20%. Over 30 years, that fee difference can cost you tens of thousands of dollars.

Currency risk. The Indian rupee has depreciated against the Canadian dollar over time. When you concentrate in a single emerging market currency, you amplify that bet. XEQT’s diversification across dozens of currencies naturally hedges this.

Political risk. India has imposed retroactive taxes on foreign companies and implemented surprise policy shifts. Each Southeast Asian country has its own political risks. With XEQT, you spread exposure across 49 countries, so no single government’s misstep can significantly damage your portfolio.

Behavioral risk. When India is just 1.4% of your portfolio inside XEQT, you will not even notice a rough patch. But when India is 10-15% of your portfolio because you deliberately overweighted it, every downturn feels personal – and you will be tempted to sell at the worst possible time.

The whole point of XEQT is that it removes these decisions from your plate. The index methodology adjusts weights as market capitalizations change.

5. The Demographic Argument: Why These Markets Could Drive Global Growth for Decades

The current excitement about India and Southeast Asia is not just about what is happening right now. There is a structural argument that these economies could be the primary engines of global growth for the next 20 to 30 years. And it comes down to one word: demographics.

Population pyramids tell the story. India’s population surpassed China’s in 2023 to become the world’s largest, at over 1.4 billion people. But the crucial detail is the shape of the age distribution. India’s pyramid is broad at the base, meaning a massive cohort of young people is just beginning their working lives. China’s pyramid is inverting rapidly due to decades of the one-child policy. Japan’s is already inverted. Canada’s is top-heavy with aging boomers.

In practical terms:

• India will add approximately 200 million people to its working-age population over the next 15 years. That is nearly six times the entire population of Canada entering the workforce in a single country.
• Indonesia has 190 million people under the age of 35. These are future homebuyers, car buyers, and investors.
• The Philippines has a median age of 25. Its demographic profile today looks similar to China’s in the early 2000s, right before its explosive growth phase.

Urbanization is still in its early innings. About 36% of India’s population lives in urban areas, compared to 82% in Canada. As hundreds of millions of Indians move to cities, they will need housing, transportation, healthcare, and financial services. The same dynamic is playing out across Indonesia (58% urban), Vietnam (39% urban), and the Philippines (48% urban).

The middle class is expanding at an unprecedented rate. The Brookings Institution estimates that by 2030, Asia will be home to roughly 65% of the world’s middle class. India alone is expected to add 140 million middle-class households over the next decade – families that will start buying branded goods, taking vacations, and investing their savings, generating revenue for the companies inside your XEQT portfolio.

This is not a short-term trade. This is a multi-decade structural shift in who drives global economic activity. And XEQT positions you to benefit from it automatically.

6. What Could Go Wrong – and Why XEQT’s Small Allocation Protects You

I have spent most of this post explaining why India and Southeast Asia are exciting investment destinations. Now I need to talk about the risks, because they are real, and pretending they do not exist would be irresponsible.

Political and governance risk. India’s political landscape can shift unpredictably. Regulatory changes, tax policy surprises, and geopolitical tensions are ongoing concerns. In Southeast Asia, Thailand has experienced multiple military coups in recent decades, the Philippines has dealt with governance challenges, and Myanmar’s political crisis has destabilized parts of the region.

Currency volatility. The Indian rupee has lost roughly 40% of its value against the Canadian dollar over the past decade. Even if Indian stocks go up in rupee terms, the returns can be significantly eroded when converted back to Canadian dollars. Southeast Asian currencies face similar pressures during periods of US dollar strength.

Valuation risk. Indian stocks are not cheap. The Nifty 50 trades at price-to-earnings ratios of 20-24x, comparable to or higher than some developed markets. When you pay a premium for growth, you are vulnerable to disappointment if that growth does not materialize as expected.

Capital controls and liquidity. Some emerging markets restrict foreign investment in certain sectors, and smaller emerging market stocks can have wider bid-ask spreads and higher trading costs.

Correlation risk during crises. When global markets panic, emerging markets often fall harder and faster. During the 2020 COVID crash, emerging market stocks fell further than the S&P 500 and took longer to recover.

Here is the critical point: all of these risks are real, and XEQT’s approximately 7% allocation to emerging markets is specifically designed to account for them.

When India and Southeast Asia represent about 2% of your total portfolio, a 30% crash in Indian stocks translates to a 0.4% hit to your overall portfolio. You would barely notice it. But if you had overweighted India to 15% of your portfolio by buying a dedicated India ETF, that same crash would cost you 4.5% – painful enough to trigger panic selling and potentially lock in permanent losses.

XEQT gives you enough emerging market exposure to benefit from the upside when things go well, while keeping the allocation small enough that the inevitable setbacks do not derail your financial plan. That is not timid investing. That is intelligent risk management.

7. Historical Perspective: Japan in the 1980s, China in the 2000s, and the Lesson for India Today

If the India hype in 2026 feels familiar, it should. We have seen this movie before – twice.

Japan in the 1980s. The Japanese economy was growing rapidly, the Nikkei 225 rose from about 10,000 in 1984 to nearly 39,000 by the end of 1989, and Japanese stocks represented over 40% of the global stock market. Then the bubble burst. The Nikkei spent the next 34 years below its 1989 peak. An investor who concentrated in Japanese stocks at the peak would have waited until 2024 to simply break even – in nominal terms, without accounting for inflation.

China in the 2000s and 2010s. China grew at 8-14% GDP annually for decades and became the world’s second-largest economy. “Invest in China” was the consensus recommendation from nearly every major financial institution. Yet from 2007 to 2026, the MSCI China Index has delivered disappointing returns compared to global stocks, despite China posting the strongest GDP growth of any major economy during that period. Economic growth does not guarantee stock market returns.

The lesson for India in 2026. I am not saying India will follow the same path as Japan or China. India’s story is different in important ways – its demographic profile is younger, its private sector is stronger, and its stock market has a longer track record of reasonable corporate governance. But the broader lesson is universal:

Every generation has a “can’t lose” market. The investors who get hurt are the ones who concentrate too heavily in the hot story of the moment.

The investors who do well over decades are the ones who own everything – the booms and the busts, the hot markets and the boring ones, the growth stories and the value plays. That is exactly what XEQT does. When Japan was booming, a global portfolio owned it. When China was booming, a global portfolio owned it. Now that India is booming, your XEQT portfolio owns it. And if India disappoints, your portfolio will not be devastated, because India is one piece of a globally diversified puzzle.

History does not repeat exactly, but it rhymes. The rhyme here is: diversify, do not concentrate.

8. XEQT Captures the Growth Automatically – You Do Not Have to Predict the Winner

This is the part that most investors miss about how index investing actually works.

India was roughly 8% of the MSCI Emerging Markets Index five years ago. It is roughly 20% today. If the India growth story plays out, it could be 30-35% in ten years. That means your XEQT exposure to India would grow from approximately 1.4% today to potentially 2-2.5% of your total portfolio – without you making a single trade. The same applies to Southeast Asia. If Vietnam’s companies grow, its index weight increases. If Indonesia’s banking sector expands, Indonesian stocks take a larger share.

This is the beauty of market-cap-weighted indexing: the winners get bigger automatically. You do not have to predict which country will grow fastest or monitor geopolitical developments in Jakarta. XEQT handles all of this for you, for a total MER of 0.20% per year.

Compare that to the alternative: you spend hours researching India ETFs, pay a higher MER, agonize over allocation, panic when it drops 15% in a quarter, sell at the bottom, miss the recovery, and end up with worse returns than if you had just bought XEQT and gone for a walk.

9. The Bottom Line: Global Growth, Automatic Exposure, Zero Guesswork

India and Southeast Asia are writing one of the most exciting economic stories of the 21st century. The demographic tailwinds are real. The manufacturing shift from China is accelerating. The digital transformation is happening faster than anyone predicted.

And if you own XEQT, you are already invested in all of it.

You own shares of India’s largest bank, its biggest IT companies, and its most diversified conglomerate. You own pieces of Indonesia’s financial sector and Southeast Asia’s largest e-commerce platform – alongside American tech giants, European industrials, Canadian banks, and thousands of other companies across 49 countries.

You do not have to predict which country will outperform. You do not have to time your entry into emerging markets or manage currency risk. You just buy XEQT, hold it, and let the global economy work for you.

The India and Southeast Asia boom might continue for decades. It might also hit bumps along the way. History tells us both outcomes are likely at different points. With XEQT, you get the upside of emerging market growth with the protection of global diversification. You capture the India boom without betting your retirement on it.

I will keep buying XEQT every month, knowing that my portfolio will automatically adjust to wherever global growth happens next. Whether that is India, Indonesia, Vietnam, or somewhere nobody is talking about yet, I will already be there.