First State Indian Subcontinent
We believe First State Indian Subcontinent deserves to be viewed as best in class, says Morningstar analyst Mark Laidlaw.
There is much to like here, not least Vinay Agarwal, who has been lead manager since August 2012, and the team at First State Stewart Asia. Agarwal’s depth of analysis is impressive not only when looking at the major macro issues that drive the Indian economy, but especially when getting down to the nitty gritty at the stock level.
The process has been consistently (and successfully) applied across all strategies managed by the team. Preferred companies are those that have quality and trustworthy management, have sustainable earnings drivers and are not trading at inflated valuations. It’s no surprise that that most of the investable universe fail to meet the exacting standards set down by the investment team.
The portfolio’s holdings provides an insight into how the team thinks--the end portfolio bears little resemblance to either the wider peer group or the MSCI India Index. The fund holds Morningstar’s highest analyst rating of Gold.
JP Morgan Indian Investment Trust (JII)
An experienced portfolio management duo that has worked together for over a decade helps to make JPMorgan India a favoured option, says Laidlaw. Lead manager Rukhshad Shroff and comanager Rajendra Nair have worked together on the strategy since 2005, bringing a level of continuity that few can match in this space.
The process has been in place and refined over a number of years, emphasising buying high-quality companies and allowing the long-term secular growth of the Indian economy to drive returns. We feel this has been consistently applied over time.
Another attraction is the board’s commitment to manage the discount. The board itself brings deep and relevant experience of investment, particularly in the Indian market, and we believe this strengthens the overall proposition.
Franklin India
The Franklin India fund continues to be a strong choice for India-equity exposure, says analyst Simon Dorricott. The fund benefits from a seasoned portfolio manager in Asian CIO Sukumar Rajah, who ultimately heads the Chennai-based India team that is led by Anand Radhakrishnan and Anand Vasudevan.
The investment process is primarily bottom-up. It relies upon in-depth company research, with a focus on identifying high-quality companies that can achieve sustainable growth over time. There is, however, also scope to hold out-of-favour names where there is belief in the longer-term outlook despite shorter-term challenges. This approach has delivered solid returns over the managers’ tenure.
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