The £280m trust’s half year report, released yesterday (4 August), showed a return of 9.5 per cent for the six months to June 30, lower than the 10.9 per cent return achieved by the AIC Global Emerging Markets Index in the same time period.
Since its launch in June 2014, FEET has returned 15 per cent, compared with 24 per cent for the sector.
Despite that weak performance, the trust trades at a premium to net assets of 1.9 per cent.
In a bid to turn around the performance of the emerging market trust, Mr Smith said he wants to invest more into Indian equities.
In a statement to the market, he said the current rules of the trust forbid any more than 40 per cent of the capital to be invested in shares listed in any one country.
The trust’s current exposure is to Indian shares is 38 per cent.
Mr Smith has long regarded India as the emerging market containing more of the sort of companies he wants to invest in.
The fund manager said he is finding a number of “compelling” investment opportunities in India he would like to be able to buy.
Mr Smith, who also runs the £11bn Fundsmith Equity fund - the top performer over three and five years in the IA Global sector - said he has recently bought stakes in two Indian drug companies, as well as an Indian manufacturer of motorcycles.
He said: "Predictions are always dangerous but the likelihood is that the largest direct influence on our portfolio occurred on the first day of the second half of the year.
"On 1 July the new Indian goods and services tax came into force. There is plenty to worry about with this development.
"However, despite all these drawbacks it seems likely that the implementation of the GST is the first and a major step on the route to making India one national market, at least from a tax perspective, for the first time and so will become another plank in the economic transformation of what seems destined to become the world's largest country by population.
"If this proves to be the case then FEET should be well positioned to benefit but even so we would be wise to buckle our seat belts for a bumpy ride. Although of course, there are no seat belts on a motorbike."
Mr Smith pointed out that two of the top five contributors towards the trust's performance were Indian companies - Britannia Industries and Godrej Consumer Products.
