HEAD-TO-HEAD: Alquity versus Fidelity

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Darius McDermott, Chelsea Financial Services

Introduction

Indian equities rose to a record high in 2021, but already that strength has dissipated during the past two months, amid rising inflation, economic disruption caused by the newer variants of the coronavirus, global supply-chain blockages and, most recently, the fall-out from Russia’s invasion of Ukraine.

The MSCI India index surged 26.66% last year, outperforming the MSCI World index (22.35%), and in sharp contrast to its rival emerging market behemoth China, with the MSCI China index plunging 21.64%, according to FE Fundinfo data.

However, the MSCI India is down 7.32% so far this year, while the MSCI World and MSCI China have dropped 8.72% and 8.23% respectively.

Analysts expect Indian equity markets to deliver modest returns, undergo correction and be volatile in 2022 as the Reserve Bank of India is likely to raise interest rates and unwind excessive liquidity in the financial system. Nevertheless, economic growth is expected to remain well above its long-term trend, with the likelihood of further upgrades to consensus GDP growth for the year ending March 2023, as recovery broadens.

Against this background, FSA asked Darius McDermott, managing director, Chelsea Financial Services, to select two India equity products for comparison: the Alquity Indian Subcontinent Fund and the Fidelity Funds India Focus Fund.

Source: FE Fundinfo, Morningstar. (Data in US dollars, 3 Mar 2022)

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