Equities  

Product review: Schroders Indian Opportunities fund

Seeking opportunities across all types of equities is the Schroders Indian Opportunities fund, launched on 10 September.

Advised by Axis Asset Management Company (Axis AMC), it is designed to complement the existing Schroder ISF Indian Equity fund, but has a different management style.

While the ISF Indian Equity fund takes a large-cap angle, the Indian Opportunities fund takes an unconstrained all-cap approach. Investments will mainly be in equity and related securities of Indian companies with large national exposure.

Article continues after advert

Chandresh Nigam, managing director and chief executive of Axis AMC, identifies “certain short- and medium-term cyclical challenges” in India, but also acknowledges its fast growth as a major economy.

It is not managed relative to a benchmark and a £1,000 minimum investment, plus an ongoing charge of 2.08 per cent, apply.

www.schroders.com

Comment

There are still reasons to be cautious when it comes to Indian markets.

The Indian prime minister’s economic advisory council recently lowered the expected growth for the current financial year from 6.4 per cent to 5.3 per cent, which reflects the projections of the central bank.

The forecasts must be considered in tandem with the fact that, in the most basic terms, India is still a relatively poor country.

It is, however, a region that encourages a long-term view as it has a lot of room to grow.

The fund gives the investor one foot in the large cap universe, but it also gives lots of room to experience the huge potential of Indian small and mid caps.

The volatility of the Indian market means this could be a risky choice, but the exposure to smaller companies could be extremely rewarding for an investor willing to take a chance.

Although the existing Schroder ISF Indian Equity fund has a four-star Morningstar rating, it has performed poorly over short time periods, down 12.5 per cent over the past month, compared with a sector average of -3.1 per cent.

Its longer-term performance is more positive, however.