Fund of the Week: First State Indian Subcontinent

India has had its fair share of problems in recent months. Rocked by scandal since the Commonwealth Games, it has also endured soaring inflation which is in turn pushing food prices to near all time highs.

But while things are certainly not as rosy as they were a few years ago, the long-term picture remains clear - India, along with China, is emerging as a world super power. 

One of its key advantages is the huge growth in domestic demand as more and more of the country's 1.3 billion people become more affluent. There is still huge room for further growth here, as 500 million Indians are still below the poverty line.

My pick for actively investing in the market is the First State Indian Subcontinent fund run by David Gait. Gait has returned 95% since he took over the fund in 2008, nearly doubling the returns of India's Nifty Fifty index. He has proved to be a consistent but cautious investor in one of the worlds most dynamic markets. The short-term picture may be unclear, but I back him to steer the fund away from trouble and make the most of India's growth potential.

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