Performance Rückblick 2005
Performance Rückblick 2006
Performance Rückblick 2007
Sanjiv Duggal: "The Indian equity market is set to remain volatile in the near term, but we are optimistic in the medium to longer term. The market has rallied strongly toward the end of June, however any weakness in the short term would provide a good entry opportunity.
Our positive stance for the medium and long term is based on our view that the Indian economy will continue to grow strongly and that this market will be relatively resilient to the European debt crisis. In terms of equities, domestic focussed sectors are preferred to global sectors, demonstrating our confidence in India’s growth story compared to that of the global economy.
Certainly, there is already evidence of strong economic growth, with GDP for the three months ending March 2010 rising 8.6% year on year. This was primarily driven by the industrial and services sectors, with agriculture also being a major contributor. We expect this trend will continue to rise in to the second quarter of 2010. Factory output is gaining strength in India as wages rise, spurring demand for goods and services. The strength of the Indian economy is supported by robust domestic consumption and an uptick in the investment cycle. For instance, in the fiscal year ended March 2010, passenger car sales in India grew at the fastest pace in six years, up 25% to 1.53 million units from 1.22 million a year earlier. The cement sector is also important, and the revival in domestic demand and infrastructure-related activities is resulting in strong dispatches.
Thus far, India has been relatively resilient to the European debt crisis. Approximately 20% of India’s exports go to Europe. Although the decline in demand in Europe will have some impact on India, this will be limited. If you consider manufacturing for example, this accounts for approximately 20-25% of the Indian economy. Half of this is exported, and of that half, approximately 20-25% goes to Europe. As such, while there is of course some impact, this has been limited. Furthermore, one of India’s key sectors is Information Technology. The US remains a major export destination accounting for about 60-70% of revenues. Therefore, given the strong domestic economy, we would not be too concerned about India from a European crisis perspective.
Despite the strong growth in India, we are not expecting a major rise in interest rate going forward. There was some monetary tightening earlier in the year, but this is more of a normalisation of policy conditions following unprecedented measures last year to support the economy amid the global financial crisis. Looking forward, the key consideration for the central bank is inflation and underlying economic growth. Given the recent developments in Europe and the sharp decline in commodity prices, we believe that inflation at the margin has become less of an issue. Therefore, our view is that the rise in interest rates will be lower than what the market expects.
In addition, we do not expect that overheating in the economy will be a concern. India faces the typical issue – that is when the economy grows quickly, the country develops a lot of bottlenecks. Therefore, the Central Bank’s policy is to try to ensure more funding or to make funding easier for infrastructure to try to ease the bottlenecks in the medium term. Again, the central bank is heavily focussed on the economy, so overheating is not a major concern currently.
Because we are confident about strong domestic growth and while global uncertainties remain, we are finding the best opportunities in domestic sectors.
Within those domestic sectors, we incrementally prefer defensive stocks such as utilities, healthcare, telecoms and consumer staples over growth sectors, given the concerns over European debt and high relative valuations of growth sectors. We believe that these defensive sectors will show resilience. Although we have been underweight on consumer staples, we are adding to that position.
We still like consumer discretionary stocks, where we have a big overweight relative to the benchmark. One of our key holdings amongst consumer discretionary stocks is the Indian auto maker Maruti Suzuki which we still consider to be very cheap, due to stock-specific reasons.
Another area we favour is Real Estate, where we have holdings in Unitech and Indiabulls Real Estate, both of which offer significant value.
On the contrary, given the global uncertainties, there is less opportunity in global cyclicals and materials.
The main risk to the Indian equity market is that the European debt crisis is longer and more prolonged than expected. Although the domestic market is in a robust position, Indian equities will suffer if there is a general aversion to risk globally, which could lead to Foreign Institutional Investor outflows, potentially causing volatility in the market. We remain optimistic for the medium to longer term, as mentioned earlier, and any weakness in the short term would provide a good entry opportunity."
Performance Rückblick 2008
Performance Rückblick 2009
Performance 2010 - Year-to-Date
Performance seit 2005
Investmentprozess und Strategie - Wie investiert der Fondsmanager?
Sanjiv Duggal: "The Current Strategy: Prefer domestic sectors over global sectors; incrementally prefer larger cap over smaller cap; incrementally prefer defensive/value sectors to growth."
Investment Ausblick
Sanjiv Duggal:
"Incredible India – Seductive Investment Story
- Strong & sustainable GDP growth
- Favourable demographics
- Improving macro economic trends
- Poor infrastructure to improve – social & physical >> investment spend
- Renewed focus on rural India
Potential shocks in the India story
- Inability to take critical decisions on reforms
- Rising commodity prices affect fiscal and current accounts
- Excessive tightening by Central Bank on back of higher than expected inflation
- Fast appreciating rupee hurts core operating earnings
- Supply of paper
- Lack of demand for paper given rapid ratcheting up of valuations
- Others – monsoon, geopolitics."
