India`s time to shine?

Investor focus
India’s time to shine?
Not for distribution in Hong Kong
Investors in India had a tougher time than
most last year. However, a responsible and
effective policy from the Reserve Bank of
India, alongside improving global growth, has
meant that India’s economy is beginning to
strengthen. With the prospect of significant
reforms from the new government and an
economic upturn, investors have started to
feel more comfortable about investing in
Indian equities since the beginning of the
year. It could finally be India’s time to shine.
According to our fund managers, part of India’s attraction lies
in its youthful population and the large number of high quality
companies across industries such as IT, banks, consumer and
pharmaceuticals. Opposite we highlight some of the other
reasons why investors might want to consider allocating part of
their portfolio to Indian equities. However, as with any equitybased investment, it is essential that a long-term view is taken.
Over the page we highlight the four funds that are available
via our fund range for investors wanting to participate in India’s
economic growth story.
...investors have started to
feel more comfortable
about investing in Indian
equities since the beginning
of the year.
Long-term growth story remains intact
1. The Indian economy – The Indian central bank did not waste
time last year when it set about raising interest rates and
intervening in the currency markets to boost the value of the
rupee and prevent a currency crisis. These initiatives appear
to be taking effect because the currency has stabilised and
inflation is falling.
2. A new government, a new start – It is hoped that the new
Prime Minister, Narendra Modi, will exhibit the same decisive
reformist stance that he demonstrated in his home state of
Gujarat. There, his economic manifesto focused on investment
in infrastructure and reducing bureaucracy.
3. Improving corporate governance standards – Following
a number of high profile corruption scandals, the Indian
government enacted the Companies Act 2013 in September
last year. This is a big step in bringing India’s 50-year-old
corruption laws up to date and ensuring that businesses
incorporate high standards of corporate governance in
their strategies.
4. Attractive valuations – The recent setback in the Indian
stock market has provided an entry point for investors to
some of the country’s key industries, including technology,
outsourcing and energy.
5. A compelling long-term outlook – The long-term
investment case for India is based on expectations of future
growth. As people get richer, they will have the money to buy
more goods and services. This theme is not going to change
overnight; it is a long-term phenomenon which has many years
to run. For those Indian companies which have positioned
themselves to take advantage of the growth in the consumer
market, the long-term opportunities could be substantial.
01
Gateway to India
JP Morgan
Reliance
India Fund
∙ JP Morgan’s specialist Asia-Pacific investment
arm, which has been established in the region
for more than 40 years, is responsible for
managing the fund.
∙ Rajendra Nair, an investment manager and an India country specialist,
has been involved in the management of the fund
since 2007.
∙ The fund aims to provide access to India’s demographic growth potential
by investing in carefully selected Indian equities.
∙ The 66-strong investment team uses a proven investment process which
has been developed and enhanced, and which is specifically designed to
identify opportunities in Asia.
Emergent India Fund
∙ Sunil Singhania is the fund’s lead manager
and he boasts more than 21 years of investment
experience.
∙ The aim of the investment process is to seek both
value and growth stocks in all sectors and industries across the Indian
equity market.
∙ Sunil and his investment team focus on investing in companies with a
competitive advantage, scalability and a strong management team.
∙ The stocks chosen for investment are reviewed independently by a
quantitative analyst team to ensure they meet the investment criteria.
As well as analysis, company meetings play an important role in the
investment process.
HSBC
Aberdeen
Indian Equity Fund
∙ Hong Kong based Indian equity specialist
Sanjiv Duggal has spent 17 years in one market,
on one fund.
∙ The fund aims to provide capital growth by investing
in a mix of medium and large companies in India. It also holds shares in
companies from outside India, but which carry out most of their business
in India.
∙ In terms of the investment process, a macroeconomic overlay is combined
with bottom-up stock picking, meaning that both the economic backdrop
and company fundamentals are analysed.
Global Indian Equity Fund
∙ The fund is managed by a team of equity fund
managers, headed up by Hugh Young.
∙ With more than 30 years experience of
investing in Asia, Aberdeen has been running
dedicated Indian portfolios since 1996.
∙ The fund aims to achieve long-term capital growth by investing in equityrelated investments that are registered in India or derive their income
from India.
∙ The investment team employs a proven process based on first-hand
research to identify the most attractive opportunities in the Indian
equity universe.
Key takeaway
Investors were justifiably worried about investing in Indian equities last year, as economic data came in
below expectations. However, this is not the first time the Indian economy has faced difficulties, and on
those occasions in the past, the country emerged stronger than before.
With growing consumer demand, efforts to improve corporate governance standards and an agreement
across many quarters that reform is drastically needed, India should finally cement its position as one of
the world’s dominant economic powers.
For more information on the funds, please refer to the fund factsheets on our website.
Please note that securities held within a fund may not be denominated in the currency of that fund and, as a
result, fund prices may rise and fall purely on account of exchange rate fluctuations. You may get back less than
you have paid in.
Funds that invest in individual countries may carry more risk than those spread across several countries.
These funds can be more volatile and higher risk due to their limited exposure.
A number of sources have been used for this document, they are available upon request from Friends Provident
International. All information quoted correct at the time of writing (May 2014). Friends Provident International
is not authorised to give financial advice. This document is for information only and should not be considered
investment advice.
Friends Provident International Limited. Registered & Head Office: Royal Court, Castletown, Isle of Man, British Isles, IM9 1RA. Telephone: +44(0) 1624 821212.
Fax: +44(0) 1624 824405. Website: www.fpinternational.com Incorporated company limited by shares. Registered in the Isle of Man No. 11494. Authorised by the Isle of
Man Insurance & Pensions Authority. Provider of life assurance and investment products. Authorised by the Office of the Commissioner of Insurance to conduct long-term
insurance business in Hong Kong. Registered in the United Arab Emirates as an insurance company (Registration No.76). Registered with the Ministry of Economy as a
foreign company (Registration No. 2013): Registration date 19 April 2007. Authorised by the United Arab Emirates Insurance Authority to conduct life insurance and funds
accumulation operations. Registered in Singapore No. F06835G. Licensed by the Monetary Authority of Singapore to conduct life insurance business in Singapore. Friends
Provident International is a registered trade mark of the Friends Life group.
FUNDS_IF_INDIA_04.14
02