Baring Asset Management will launch the Baring India Fund which will focus on Indian equities and equity-related securities of companies listed in India or which carry out the predominant part of their economic activity there.
The primary focus of the account will make up at least 70 percent of the fund at any given point. Barings will invest up to 30 percent in companies listed outside India and within the Indian subcontinent which still conduct a significant proportion of their business within India. The fund will have a relatively high concentration of between 30 and 50 holdings.
The fund, set to launch on December 7, will be managed by Ajay Argal, who recently joined Barings’ team in Hong Kong. He was previously lead manager of the Birla Sunlife India Advantage Fund and the Excel India Fund, and has over 18 years of investment experience.
Barings believes that the Indian economy will continue to sustain the high GDP growth, driven by fast-developing upper middle and high-class consumer segments, low personal and national debt, and extensive government spending.
“With a stable and vibrant political system in place, we believe the Indian economy is well positioned to embark on a period of productivity-led growth and that this should translate into a period of strong equity returns for investors. Domestically, India’s youthful population is fast developing a preference for consumer goods, while demand for housing and for financial services is likely to remain strong for many years to come as the pace of urbanisation accelerates. The government plans to invest USD1 trillion on upgrading India’s roads and energy sectors and this should help improve productivity as well as provide a further boost to growth,” Argal says.
“Unlike many emerging economies, India’s main export is information technology services, where a well educated workforce and cost advantages make it a global leader. These services tend to be supplied on a long-term contract basis, providing India with a degree of shelter from the extremes of the global economic cycle, ” he adds.
Source: The Asset