The Jupiter India Fund aims to achieve long-term capital growth by investing in companies that operate or reside in India. It will invest in a diversified portfolio of around 60 stocks, with a bias towards medium and larger-sized companies, in order to preserve the fund’s liquidity.

The Indian economy has been through a fundamental shift over the past 30 years and is now experiencing the positive effects of a ‘baby boomer’ generation – lots of young people born in the 1980s supporting a much smaller proportion of older workers.

According to Jupiter, India has one of the highest proportions of economically active citizens in the world, with a total population size of 1.13 billion people, 60 per cent of whom are under 30 years of age.

India plans to spend an estimated US$475 billion between now and 2012 on roads, railways, ports, electricity transmission lines and other infrastructure projects.

The development of a world-class infrastructure is central to India’s emergence as a global economic powerhouse.

The fund is invested in a single emerging geographical area, and so there is an increased risk of volatility in addition to exchange rate fluctuations. For this reason, it is aimed at investors with a medium- to long-term outlook who can accept the potential risks of emerging market investment.

Minimum investment: £500 lump sum or £50 per month
Initial charge: 5.25%
Annual mngmt charge: 1.5%
Contact: 020 7314 7600 or www.jupiteronline.co.uk

James Davies says :
There have been several fund launches recently aimed at tapping into the opportunity provided by investing in India. Jupiter is the first of the major UK asset managers to bring an onshore fund to the wider UK market.

The fund will be managed by Avinash Vazirani, who has over 12 years’ experience managing equities, a significant proportion of which he has spent managing Indian sub-continent equities. Avinash looks to identify stocks that he believes are priced reasonably, while also investing in companies that are best placed to take advantage of the huge demographic, economic and structural changes currently taking place in India.

While the investable universe of the fund is around 7,000 stocks, in practice the fund will be firmly centred on the mid-and large-cap end of the market. A key concern of the fund manager is controlling the risk within the fund, an important consideration in a region where stock market volatility is known to be particularly acute.

Avinash considers himself a conviction investor and is therefore prepared to take quite large positions within a company. He is no day-trader, however, preferring instead to invest over the long term.

From an investment perspective, India is a country of contradictions. It has an enormous, highly educated and skilled middle class, while being home to tens of millions of desperately poor. India has many high-tech hubs and a consumer market that in many ways is more developed than China’s. But the country also suffers from woeful infrastructure, crippling bureaucracy and local corruption.

How India deals with the challenges it faces will have a big impact on how competitive its companies can continue to be. India, like China, will become an even more dominant player in the global economy, but investors should not see the country as a short-term investment opportunity. Long-term investors who can tolerate the ups and downs of the Indian stock market should certainly consider allocating towards the country, and the Jupiter India Fund should be on their radar.

I, for one, will be keen to see how this Jupiter fund performs compared with my current first choice for India funds, the First State Indian Subcontinent Fund, which has been open to UK investors for around 18 months.

3.5 stars