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Investment Times

The brightest spot in emerging markets?

| 18 November 2016 | A A A
The brightest spot in emerging markets?

No recommendation

No news or research item is a personal recommendation to deal. All investments can fall as well as rise in value so you could get back less than you invest.

India is in the midst of change. The country elected pro-business candidate Narendra Modi as its new prime minister in 2014, and the world cheered his plans for reform. His government aims to streamline India’s business environment and lift hundreds of millions out of poverty.

India’s complicated and fragmented tax system, for example, has previously impacted growth. This has hampered businesses from expanding beyond their home state to challenge on a grander national, or even international, stage. On the road to reform, India’s parliament recently approved a bill that will pave the way for a single national rate of tax on goods and services. The benefits are expected to be huge and far-reaching.

A new social security and benefits system is also being implemented, while banks are improving the way payments are made to account holders. This will allow a greater proportion of India’s population to become economically active, and should stimulate consumer demand. It marks another step towards the country’s transition into a modern-day economy.

While implementing economic and political reform will take time, we feel that India is emerging as a bright spot in the developing world. Indian companies are supported by a young and educated workforce, and an increasingly affluent population is spending more on consumer goods and services. The country is also taking its place as an IT and engineering powerhouse.

India Sector Breakdown

Our favourite way to invest

The Jupiter India Fund is our favoured way to access India’s exciting growth potential, having been on the Wealth 150 list for some time, and it currently features in our Wealth 150+. The fund is managed by Avinash Vazirani, one of the industry’s few specialist Indian equities investors with an impressive 20 year track record of superb stock picking.

He searches for companies he believes have strong growth prospects, but have been overlooked by other investors. Once their prospects are recognised by the wider market their share prices should benefit.

The fund has tended to hold a bias towards higher-risk small and medium-sized companies, which we believe has added value over time. This positioning differentiates the fund from many of its peers that tend to be concentrated in some of India’s largest companies. Since launch in 2008 its performance has been impressive, delivering growth of 182.3% compared with 78.1% for the FTSE India Index. Remember past performance is not a guide to future returns.

While the longer-term prospects look promising, the fund can fall as well as rise in value so investors could get back less than they invest. A long time horizon is therefore essential for investing in this higher-risk region, to which we would only suggest allocating a small portion of a portfolio.

Exclusive low charge for our clients

As our preferred way to access an increasingly exciting market we’ve recently promoted the fund to the Wealth 150+. We have also negotiated a significantly reduced fee on this fund, exclusively for Hargreaves Lansdown clients. The new discounted ongoing fund charge of 0.69% is reduced from the standard ongoing charge of 1.06%. This is in addition to the Vantage charge of up to 0.45% per annum.

Overall we view this fund as a superior choice for gaining pure exposure to the Indian market. Combined with the reduced charge, we are excited about its long-term prospects.

Why invest in this fund?

  • India offers an exciting, adventurous investment opportunity.
  • Rising consumption and economic reform is driving growth.
  • Experienced manager Avinash Vazirani has built an impressive 20-year track record stock picking in India.
  • He favours higher-risk smaller and medium-sized companies with the potential for exceptional growth.
  • We have negotiated a new exclusive lower fee for HL clients.

Jupiter India

Net Initial Charge 0%
Ongoing charge 1.06% p.a.
Saving 0.37% p.a.
Net OCF 0.69% p.a.
Performance Fee No

Find out more about this fund including how to invest

Please read the key features in addition to the information above.

The charge to hold funds in the Vantage Service is 0.45%. View our charges

The value of investments can go down in value as well as up, so you could get back less than you invest. It is therefore important that you understand the risks and commitments. This website is not personal advice based on your circumstances. So you can make informed decisions for yourself we aim to provide you with the best information, best service and best prices. If you are unsure about the suitability of an investment please contact us for advice.