The firm launched the India Dynamic Equity Fund on 15 July.
The vehicle aims to achieve medium-to-long-term growth of the portfolio by investing primarily in growth-oriented Indian stocks, which are listed on the Mumbai Stock Exchange and the National Stock Exchange in India.
It can invest in a mix of large-, mid- and small-cap shares. The strategy is to find growth at a reasonable price, which tends to combine both growth and value investing approach.
The focus is on industries with stable and secular growth prospects, high revenue and profit growth. It will use both a top-down and bottom-up approach based on fundamental analysis, macro indicators and sector views.
The product is for institutional investors in Europe, the Middle East and South Asia, but the firm is working on including the professional investor segment, according to Praveen Jagwani, chief executive.
UTI is also getting the fund registered in Switzerland, Germany, Singapore, Hong Kong, Oman, Bahrain and the UK for distribution through independent financial advisors and private banks.
Medium-term outlook intact
The Indian market has seen a sharp rally and now concerns are building over progress of the much-hyped reforms as well as corporate sector earnings.
“Corporate earnings have not kept pace with market expectation, given the hype around Modi’s reforms,” Jagwani said.
“Yet, despite the rally and the subsequent pullback, the Indian equity market remains poised at around 16 times forward earnings, which is the 20-year average. Thus the Indian market is certainly not over-valued. [But] it is not a bargain either,” he added.
He is positive on Indian equities over the medium-term due to strong domestic consumption and the favourable demographic profile.
“[There is a] lack of credible scalable equity opportunities elsewhere in the world. [Hence], India is well positioned as a relative-value trade,” he added.
UTI Asset Management Company, India’s oldest asset manager, is the investment advisor of the fund. In India, the fund house manages $34bn in AUM.
The firm’s offshore business is located in Singapore and its current investor base includes private banks, family offices, insurance companies and pension funds. The Singapore office has an investment management team and product structuring unit.
A previous Indian equity vehicle, domiciled in Mauritius, was launched in 1986.