Rated Fund 2014, 2017. A trust with a small and medium-sized companies bias
This trust, highly commended in Money Observer's 2016 investment trust awards, was taken over by Nitin Bajaj in April 2015. He was tasked by the board with changing its focus away from medium-sized to larger companies and steering it towards an emphasis on small- and medium-sized businesses.
Bajaj had previously achieved impressive returns running an Asian smaller companies fund for Fidelity. He does not try to time markets but is purely company-focused. He uses analysis from Fidelity's local analysts, who research companies' valuations, financial strength, cash flows, competitive advantage, business prospects and earnings potential.
Bajaj says there are three guiding principles behind his investment process: understanding a business, paying the right price for it and being aware of existing market expectations. He looks for strong businesses run by able managements available at reasonable valuations with the aim of making money over three to five years.
He likes smaller companies for three reasons. First, this area of the market provides opportunities to invest in the 'winners of tomorrow' before they become well known.
Secondly, smaller companies are not widely followed by professional investors and tend to be less well-researched, so the sector offers investors a greater chance of finding mispriced businesses.
Thirdly, with over 17,000 listed companies in the region, there are plenty of firms to choose from in both the winners-of-tomorrow and mispriced business categories.
Bajaj's primary objective is to generate absolute positive returns. So besides looking for firms with growth potential, he focuses hard on identifying and avoiding companies that may leave him suffering significant capital losses.