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A passage to India

Assessing the market suitability of the fund, Michael Philips proprietor Michael Both says: “If the case for investing in China is good, India’s prospects on several measures may be better. It is a giant democracy able to undercut most of the world, with a well-educated, export-minded population.”

On the positive side, Both feels there is undoubtedly the prospect of long-term growth at rates well above the UK and other developed economies. He says: “There is a risk premium for investing in India, which is due partly to the ensnarling of business by red tape – or worse – and sometimes the difficulty of repatriating investment profits. But for those wanting to diversify and who are prepared for these and currency risks, India deserves very serious consideration.”

Both points out that ABN Amro already has experience in the region through its generalist emerging markets fund, so a country-specific fund is a logical extension rather than a leap of faith on to a bandwagon.

“ABN Amro has long established itself in emerging markets and already has a large presence in India, thanks to its banking network. Its fund managers are no slouches – Artemis is its UK investment arm – so although one might generally prefer funds with a track record, you might be prepared to give them the benefit of the doubt here.”

Considering potential drawbacks, Both says: “I cannot actually find anything bad to say, which makes a pleasant change.”

However, he finds the website light on useful information, especially as the key features were only available in Dutch. He says: “Since we are legally required to disclose about three trees’ worth of compliance whenever recommending funds, one could expect ABN to make an effort to make this easy using PDFs. I could not get its UK site to work for most of a day, which suggests that a bit of effort on improving its UK broker interface might not be time wasted.”

Addressing the issue of possible competitors, Both suggests the JP Morgan India investment trust and specialist Indian open-ended funds.

In conclusion, Both says: “ABN was very cagey about the level of commission available to intermediaries, despite an unambiguous initial sales charge of 5.25 per cent. It eventually suggested 3 per cent was typical and that trail commission would never be considered. To some extent, this may be irrelevant since a fee can, of course, be negotiated separately with your client, especially if hold via a wrap platform such as Transact.”


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