New for 2017. Plenty of growth potential but not for the faint-hearted
Investors in single-country funds must be especially prepared for volatility. However, we regard this fund's manager, Avinash Vazirani, as one of the UK's most experienced Indian equity investors. Vazirani makes a strong case for India's growth potential, not least its population of 1.3 billion, of whom nearly 70 per cent are under 35.
He points out that its stock market is also huge and diverse, comprising over 4,000 listed companies. They range from dynamic local airlines to innovative pharmaceuticals companies. Corporate governance, which has been a bugbear in the past, is steadily improving.
Vazirani describes himself as a 'Garp' (growth at a reasonable price) style investor, searching for companies that he believes have strong growth prospects but have been overlooked by the market. He has the flexibility to invest in medium-sized as well as larger, better known businesses.
Rather than focusing on service exports as some foreign investors do, he expects that India's long-term potential lies in its domestic economy and growing middle class.
Indian incomes are rising fast and the country's urban middle class is expected to grow from around 50 million today to reach 475 million people by 2030. He believes India's catch-up process will produce business opportunities and drive rapid economic growth.
The fund invests primarily in companies that operate or reside in India, but it may also invest in firms based in Pakistan, Sri Lanka and Bangladesh and companies which derive a significant proportion of business from India.