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Defaqto on the Elite t1ps India fund

View of Defaqto insight analyst for funds Fraser Donaldson

Donaldson says: “t1ps Investment Management is based in the Isle of Man and is a subsidiary of Rivington street Holdings. Given the company’s specialism in smaller companies, this fund intends to concentrate on small and medium sized companies, typically capitalised at £300m or less. The fund intends to remain fully invested and will not use derivatives.

It can be argued that the fundamentals of emerging market economies are in a better position than many developed markets. The fast growing middle class on the Indian sub-continent means that much of the economic growth is not as reliant on exports as other emerging economies, and is perhaps less exposed to the global recession.

Nonetheless, any emerging markets investment is subject to risk, whether that be political or economic. There are risks of significant policy and taxation changes. Social instability is always a risk in developing markets. In terms of the market itself, there is less state regulation and supervision than major stockmarkets are used to and things such as auditing, accounting and financial reporting standards may be less stringent.

Most investment portfolios will have some exposure to emerging markets as there is always a higher possibility of significant returns. Most investors will be using generalist emerging markets funds, leaving the geographic investment decisions to the fund manager.

However, I can certainly see investors with bigger amounts and their advisers looking to focus in on individual markets that look attractive, and the Indian sub-continent is an obvious area of potential interest. The fact that this is a smaller companies fund may increase its risk/reward profile and reduce its potential market, but there will still be some investors that will feel this fund is worthy of consideration as a satellite to portfolio core holdings.”

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