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Schroders braves India with new unconstrained fund
by Robert St George on Sep 16, 2013 at 10:23
A new India fund has been launched by Schroders amid ongoing weakness in the country’s stock market.
Due to the rupee’s depreciation, the MSCI India index has fallen by 18.6% in sterling terms over the past six months. The existing Schroder ISF Indian Equity has marginally withstood this, losing 16.7% through the same period.
The new product, Schroder ISF Indian Opportunities, will have a different mandate as well as external investment advisers. It will take an unconstrained all-cap approach, compared with Indian Equity’s large-cap bias, and will not be run relative to a benchmark.
Indian Opportunities, while formally managed by the same Asian equity investment team at Schroders, will also be advised by Axis Asset Management Company, a local group a quarter owned by Schroders.
‘While India has certain short and medium-term cyclical challenges,’ acknowledged Chandresh Nigam, chief executive officer of Axis, ‘it has a number of long-term competitive advantages that have allowed it to grow on a sustained basis. More importantly, quality Indian companies have been able to participate in this growth by growing their profits and rewarding shareholders.’
Nigam explained that the fund would adopt a bottom-up stock selection process, looking for sustainable growth over the medium to long term.
‘We believe that the Indian economy is resilient and once the immediate headwinds subside, both global and local investors will revert their focus back to the long-term potential of the country,’ Nigam argued.‘This is an exciting addition to our existing Indian equity proposition for investors seeking capital growth from a wide range of securities in India,’ added Richard Mountford, Asia Pacific chief executive officer at Schroders. ‘It is also our first fund launch following our partnership with Axis AMC, which will give investors access to their successful and proven long-term track record of investing in India.’
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