As Indian equities regain the spotlight following the outcome of its election, FSA looks at which emerging markets funds have been betting on the region.
Over the past year, Indian equities have outperformed the broader Emerging Markets index by more than threefold: up 35.6% over the past 12 months.
Although this has been steadily increasing, the MSCI Emerging Markets index has only 18.1% allocated towards India, versus 27.1% to China.
Some fund managers have been ahead of the curve and betting more on Indian stocks than the benchmark for some time now.
Below, FSA highlights five outperforming emerging markets funds available for distribution in Singapore and Hong Kong with overweight positioning to India.
GQG Partners Emerging Markets
Managed by Rajiv Jain alongside Brian Kersmanc and Sudarshan Murthy, this also happens to be the best performing emerging markets strategy of the past 12 months.
This $3.2bn fund is up 33.2% over the period, well above its benchmark and peer group. It has 34% invested in Indian equities – also well above the 18.1% benchmark weighting.
It benefited from investing in four subsidiaries of Indian conglomerate Adani shortly after its recent nadir when the group was targeted by a short-seller report, as well as a major stake in Brazilian listed energy firm Petrobras.
However, some of its other major contributors to outperformance over the past year have been its top holdings outside of emerging markets, most notably in US and European semiconductor firms Nvidia and ASML.
PGIM Jennison Emerging Markets
Managed by Mark Baribeau, Albert Kwok and Sara Moreno, this is the second highest performer in the emerging markets sector, with a 26.4% return over the past 12 months.
This $555m strategy has 29.5% invested in Indian equities, also far above the EM benchmark weighting.
It has naturally benefitted from its Indian holdings, most notably Indian online travel company MakeMyTrip, which is up 177% over the period.
Other large Indian holdings include Varun Beverages, Max Healthcare and Mahindra & Mahindra – which have all outperformed over the period.
William Blair SICAV Emerging Markets Growth
Managed by Todd McClone, Casey Preyss and Vivian Lin Thurston, this was another strong performing fund with a 14.2% return over the past 12 months.
The strategy has roughly 30% invested in Indian equities, in companies ranging from Bharat Electronics to Reliance Industries.
One of its top-10 positions is invested in ABB India, which has almost doubled over the period. It has been benefitting from the ongoing electrification and automation efforts in India.
NB Emerging Markets Equity
Managed by Conrad Saldanha, this $292m Neuberger Berman strategy was another top-performer, up 13.8% over the past twelve months.
This fund has an overweight to small and mid-cap emerging market companies, with 27.6% invested in Indian equities.
Some of its larger Indian positions have been in energy firm Reliance Industries, which forms a large part of the EM index, as well as machine manufacturer Jyoti CNC which is up 170% over the period.
iShares MSCI Emerging Markets Small Cap UCTS ETF
Even passive vehicles that have been overweight India outperformed many of their active counterparts, like this BlackRock passive exchange traded fund (ETF).
The $509m ETF tracks small caps within emerging markets and has benefitted from the index construction which mandates a larger exposure to Indian equities than its large-cap counterpart.
The EM small cap index has 27.8% invested in Indian equities, far above the MSCI Emerging Markets index with just 18.1%.
