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The top funds in the best performing equity market in Asia

FSA looked at the top performing funds within the best performing equity market region of the last three years.
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The Indian equity market appears to be an unsung winner in the Asian equity market region based on its recent and long-term performance.

Over the past three years, India’s equity market is beating all the other Asian regional equity markets such as Japan, Taiwan, Korea and China, as well as the major developed equity markets including the S&P 500 and wider MSCI World index.

Over a 20-year period, India is also the best performer, comfortably steaming ahead of the equity markets representing the two largest economies in the world: the S&P 500 index and MSCI China index.

Despite having a similar economic growth story to China for the past two decades, including favourable demographics, urbanisation and a strong export-based economy – Indian equities have managed to outperform those in China over the period.

According to Wellington portfolio manager Niraj Bhagwat, the reason for this is because: “in China, everything is because of the government; in India, everything is despite the government.”

Where China has supported industry development and through infrastructure investments and subsidies, he explained that India’s lack of support has led to a ‘survival of the fittest’ outcome where companies that do survive generate sustainably higher returns on capital and emerge as winners, driving the equity market over time.

In the more recent years, the relative weakness of China’s equity market coupled with India’s improving macroeconomic picture after the Covid-19 pandemic has propelled the Indian equity market forward ahead of its peers in Asia.

Thanks to strong corporate earnings from Indian companies and its growing appeal as an alternative allocation to China, foreign investors have continued to buy up shares in the Indian equity market despite its strong performance.

Against this backdrop, FSA looked at the top-10 performing Indian equity funds registered for distribution in Hong Kong and/or Singapore over the past three years.

FundReturns over three years (%)
DSP BR India TIGER146.93
IDFC Sterling Value117.68
JGF-Jupiter India Select78.99
Sundaram India MidCap78.7
IDFC Core Equity77.26
ABSL India Quality Advantage73.73
RAMS India Equities Portfolio66.74
Multipartner SICAV TATA India Equity64.05
Kotak India Midcap62.47
Robeco Indian Equities59.63

Out of 66 Indian equity strategies registered across Singapore and Hong Kong, just 25 strategies have managed to beat the Indian benchmark MSCI India index return of 48% over three years.

The best performer over three years has been the DSP BR India Tiger fund, more than tripling the MSCI India index with a return of 146.93% over the past three years.

Managed by Rohit Singhania, Jay Kothari and Charanjit Singh, this strategy focuses on investing in companies set to benefit from India’s engineering and building revolution, with almost half (44%) of its portfolio allocated to small-caps.

The second highest performer was a value strategy: the IDFC Sterling Value fund with a return of 117.68%. Managed by Anoop Bhaskar and Daylynn Pinto, the fund has more than half (54%) of its portfolio allocated to large-cap stocks, with the rest split equally between small and mid-caps

The third highest performer and the only fund in the top-10 available for distribution in Hong Kong was the Jupiter India Select fund, run by Avinash Vazirani and Colin Croft. These managers follow a growth at a reasonable price (GARP) investment philosophy, which has delivered performance well above the benchmark at 78.99% over three years.

Part of the Mark Allen Group.