Stewart Investors Indian Subcontinent All-Cap: July 2026 fund update

• There was a change to the fund’s manager in 2025

• The new team continues to focus on stewardship and high-quality companies

• We expect the fund to not lose as much money when markets fall

• This fund is not on the Wealth Shortlist of funds chosen by our analysts for their long-term performance potential

How it fits in a portfolio

The Stewart Investors Indian Subcontinent All Cap fund aims to grow your investment over the long term by investing in high-quality companies that carry out business across India, Pakistan, Sri Lanka, and Bangladesh.

India has the largest population in the world and presents compelling growth potential as its economy evolves. This fund could help diversify the Asian and emerging markets portion of a globally focused investment portfolio. A fund focused on a single emerging country is a high-risk option, so investors should expect volatility. It should make up only a small part of a diversified investment portfolio.

Manager

Following the departure of the fund’s previous managers last year, responsibility for the fund’s management transitioned to FSSA, a sister company of Stewart Investors, in November 2025. The two teams previously worked together as one investment team before splitting in 2015. This meant that their investment philosophy and process were broadly aligned.

Sree Agarwal is now the fund’s lead manager. He joined FSSA in 2014 and has managed funds investing in India since 2019, becoming lead manager of the FSSA Indian Subcontinent All-Cap fund in 2024.

Agarwal is supported by co-manager Rizi Mohanty. He joined FSSA in 2016 and manages a number of funds that invest across Asia, including in India.

The managers receive support from a close-knit team of other fund managers and analysts. Although the responsibilities for both managers increased when the team took over management of Stewart Investors’ funds, we believe that they can handle these responsibilities given the overlap in approach and supportive team dynamic.

Process

FSSA’s investment philosophy centres on quality and a belief that a company’s management team is one of the most important elements. Agarwal and his team search for companies run by reputable management teams that manage risks well to help grow their businesses over the long term.

The team looks for companies that have potential to grow their earnings over the long run. This includes those that have a strong brand that competitors can’t replicate, allowing the company to raise prices without a loss in consumer demand.

The managers are high-conviction investors, which means that the fund can look quite different from the broader Indian stock market (the benchmark). Financials currently make up the largest portion of the fund, at 30.8%. There are also significant investments in consumer discretionary and industrials companies. Although the majority of the fund invests in larger, established companies, the managers can invest in higher-risk smaller companies. The small number of investments in the fund means that each can have a greater impact on the fund’s performance, both positively and negatively. This approach increases risk.

When making any investment, the managers take a long-term view. They often sell shares in companies that have performed well and could have less room to grow in future, while buying more shares in companies that have been weaker but still have growth potential.

Since becoming manager in November 2025, Agarwal has made a number of changes to the fund. He sold investments when his view differed from the previous managers and bought shares in companies when he had greater conviction. He expects to complete these changes in the coming months.

Among the companies sold was Cholamandalam Financial Holdings, which was one of the previous managers’ largest investments. Agarwal also sold the fund’s investments in IT service providers Infosys and Tata Consultancy Services because of concerns surrounding increased competition in the industry.

New investments include telecommunications business Bharti Airtel, auto parts manufacturer Bosch, and regional bank ICICI.

Culture

We like the culture and philosophy at FSSA, which forms part of the broader First Sentier Investments group. The team is made up of investors dedicated to looking after clients' money as if it's their own.

FSSA places emphasis on recruiting and maintaining great people. Every team member is an advocate of the overriding philosophy, and they're encouraged to bring their own ideas to the table.

Starting in 2025, fund managers have the option to own a share of the FSSA business. We’re pleased that many of the team took up this opportunity to commit to the business for the long term.

In November 2025 FSSA took over the management of funds previously managed by sister company Stewart Investors. Agarwal and Mohanty took responsibility for a number of funds that invest across Asia and specifically in India, which increases their workload as they transition these funds to more closely mirror their existing funds. We’re monitoring the progress of these changes as well as any impact that managing the additional funds has on their responsibilities.

ESG integration

For the team at First Sentier, ESG (environmental, social, and governance) considerations are much more than a label or box to be ticked. Taking these factors into account is a natural extension of the same investment process they’ve used for decades. The team’s philosophy is founded on stewardship – when they make an investment, they see themselves as part-owners of the business and want to make sure that it’s run in a way that will benefit all shareholders.

ESG issues form a core part of this. For example, they don’t like companies that make reckless decisions in the pursuit of short-term gains, rather than focusing on longer term, more resilient growth. A business shouldn’t exploit its workforce, take advantage of tax loopholes, or skirt around industry legislation. Importantly, it should cause little, if any, harm to the environment around it. First Sentier has made a firm-wide commitment not to invest in companies whose primary business is the manufacture of tobacco products or controversial weapons.

The team also engages closely with company management. It helps them make sure that management remain on track with sustainability initiatives and means that they can encourage a change in behaviour if required. If they don’t think that a business meets their standards or is doing enough to address a problem, then they won’t invest. The firm produces an annual Responsible Investment & Stewardship report outlining the firm’s voting record, providing engagement updates and case studies, and presenting other ESG-focused research.

This fund isn’t managed to a sustainable mandate and, although the team take ESG issues into account, ESG integration by Indian companies more broadly is often weaker than in other countries. That means that this fund has one of the highest ESG risk scores of the funds under our research coverage. The companies within the fund could, therefore, face increased regulatory scrutiny, reputational damage, and operational challenges, potentially affecting the fund's future performance.

Cost

The fund has an ongoing annual charge of 0.93%. Our platform charge of up to 0.35% per year also applies, except in the HL Junior ISA, where no platform charge applies.

Performance

The philosophy used by Agarwal at FSSA is similar to that used by the previous managers at Stewart Investors. That means that we expect the fund to perform similarly under Agarwal as it did under the previous managers.

It’s been a difficult year for the Indian market, and the fund’s benchmark fell 8.78% over the 12 months to the end of June 2026. The fund lost 14.59%* over the same time, though not all of this performance can be attributed to the current managers given that they took over the fund in November. As always, past performance isn’t a guide to future returns.

Financial services companies detracted from performance, across insurance, asset management, and credit businesses. Some of these have since been sold from the fund as Agarwal’s view on the companies differs from the previous managers.

Investments that worked well over the past 12 months include consumer goods company Marico, electrical equipment company KEI Industries, and vehicle manufacturer Bajaj Auto.

FSSA’s focus on investing in quality companies means that we typically expect their funds to offer an element of shelter when markets fall and then to rise, but not as quickly, when markets rise rapidly. This has been the case during Agarwal’s time managing the FSSA Indian Subcontinent All-Cap fund. Since becoming co-manager in 2019, the fund rose 52.82% compared with 58.14% for the average fund in the IA India/Indian Subcontinent sector and 72.83% for the MSCI India benchmark. Although it lagged the benchmark over this time, it held up better during periods when the Indian market was weaker.