Fidelity Investments has added a sterling share class to a Sicav fund that invests in India.
The Fidelity India focus fund invests mainly in shares listed in India but also holds companies deriving most of their income from the region. Factors affecting growth in the region are different to other emerging markets and this is why Fidelity is offering UK investors a pure Indian fund. The fund will invest in 60 to 80 stocks and will have a bias towards small and mid caps.
The fund is managed by Michael Gordon, Fidelity's chief investment officer, Asia Pacific ex Japan He joined Fidelity as investment director in 2000 and became managing director of the Australia office before taking his present role in 2002. He has 18 years investment experience gained at Rothschild Australia, Schroder Investment Management Australia and Fidelity.
Gordon will take a bottom-up approach to stock selection, with a preference for companies with strong balance sheets and a good cashflow. He will draw on Fidelity's network of analysts and will conduct meetings with the management of the companies he is researching.
India is under-researched and Fidelity has been impressed with the pace of economic growth in the region. Like China, India is experiencing the emergence of a middle class and educated workers are earning high salaries and this has been the driver for increased consumption. Exports have also increased and there is strong demand for Indian goods, both domestically and internationally.
However, this fund lacks the diversity of a general emerging funds which may make it too risky even for investors who want a high-risk element to their portfolio.
According to Standard & Poor's, the Fidelity Funds south east Asia fund is ranked 72 out of 165 funds based on £1,000 invested on a bid-to-bid basis with gross income reinvested over three years to October 11, 2004.