Jupiter India is an attractive way to gain Indian equity exposure, although a significant exposure to smaller companies makes it a riskier option.
The manager Avinash Vazirani has been investing in the Indian equity market for over 19 years and has run this fund since its inception in Feb 2008. The manager believes in conducting his own fundamental research, as well as using broker research to help find ideas. Analyst Amelie Thevenet has supported Vazirani since 2007.
The approach can be best described as GARP (growth at a reasonable price). The manager aims to identify stocks with arguably strong growth prospects that have not been priced fully by the market. Although he is price-conscious, Vazirani is willing to pay a higher multiple for a stock if he expects earnings growth to be high enough to compensate for this. The manager also has capital preservation as a priority and as a result he prefers to invest in high-quality companies with strong fundamentals: healthy balance sheets, sustainable competitive advantages, capable management and good corporate governance. Cash exposure can be significant, especially in down markets. The manager can also occasionally invest in deep-value stocks where he believes there is a catalyst for re-rating.
Despite a poor showing in 2013, driven by the fund’s exposure to smaller-cap stocks that struggled relative to their larger-cap counterparts, the fund’s long-term track record remains strong. Since the fund’s launch in Feb 2008 to the end of Dec 2013, it outperformed the MSCI India index and the category average by 3.14 and 3.9 percentage points per annum, respectively. The focus on fundamentals has helped the fund to protect in down markets, as is evident by the fund’s downside capture ratio relative to peers' over the manager’s tenure. Although the fund’s volatility is in line with peers', investors should be aware of the fund’s significant exposure to more volatile small and mid-caps.
All told, we continue to have strong conviction in the manager’s ability to deliver for his investors through time. The fund retains its Bronze rating.
To select Jupiter India as the Fund in Focus we used the Morningstar Fund Screener. We screened for open-end funds which carried a Gold, Silver or Bronze Analyst Rating and a Morningstar Rating of three stars or more. We then sorted by performance year to date.
