2024 is set to be an important year for elections around the world, including in India where Narendra Modi has been president for a decade. All the evidence suggests that he will be voted in for a third term, which bodes well for his programme of reform and development that has played a key role in the country’s recent strong stock market performance.
Why invest in IndiaMumbai Investment?
The International Monetary Fund (IMF) expects the Indian economy to grow by 6.7% in the 12 months to the end of March and is forecasting a similar figure of 6.5% in each of the next two years1. These are staggering numbers that reflect the increase in private consumption and investment, as well as the impressive digital public infrastructure and the rapid formalisation of the financial system.
Modi has overseen a massive improvement in the digital economy via the publicly-owned ‘India Stack’. This is a unique collection of technological layers to support the interface between government and private companies in offering tech-enabled products and services.
The development of this digital infrastructure has brought vast amounts of transactions into the formal economy and increased the tax receipts for the government in the process. Some of these revenues have been used to improve the social security and health systems, thereby boosting the disposable income and credit worthiness of large parts of the population.
A popular way to gain exposure
One option for investors keen to take advantage of these trends is the Jupiter India Fund. This actively-managed, India-focused fund has been one of this year’s best-sellers on the Fidelity Personal Investing platform.
The manager aims to provide a return, net of fees, higher than that provided by the MSCI India index over the long-term, by investing at least 70% of the assets in the shares of companies based in the country.
Strategy and portfolio
It is run by Avinash Vazirani, who looks for stocks that offer growth at a reasonable price. He has put together a diversified portfolio of 80 holdings with the top 10 accounting for 42.2% of the assets2.
Around half of the £1.1bn fund is invested in large companies worth more than $10bn, with the remainder equally divided between small and mid-cap stocks. The main sector weightings are Financials 22.2%, Energy 13.9% and Industrials 13.5%.
Jupiter India top 10 holdings
Godfrey Phillips India
Northern Trust Global Sterling
Adani Ports & Special Economic Zone
Sun Pharmaceuticals Industries Ltd
Source: Jupiter, as at 31 January 2024
How has it performed?Hyderabad Investment
Over the last 12 months the fund delivered an impressive gain of 48.1%, which was almost twice that of the benchmark. The longer term numbers also look good with a decade-long return of 319.1% versus 253.4% for MSCI India2. Please remember past performance is not a reliable indicator of future returns. After such a strong period the valuations have inevitably become more stretched, so it remains to be seen if the election will help the market to continue to move higher.
How do the costs stack up?
The ongoing charges are 0.99%, which is quite reasonable for a specialist, actively managed mandate.
Who is it suitable for?
Jupiter India is a single country fund that invests in an emerging market, which means that the volatility is likely to be higher than for a more diversified alternative. This suggests that it would only be suitable for long-term, risk tolerant investors as part of a balanced portfolio.
More on Jupiter India Fund.
Past performance is not a reliable indicator of future returns
Source: FE, 15.3.19 to 15.3.24.
1 IMF, World Economic Outlook.
2 Jupiter Asset Management, data as at 31 January 2024
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