Aim: Growth by investing in the equities of small and medium sized Indian companies, and cash
Minimum investment: Lump sum £500, monthly £25
Investment split: 100% in small and medium sized Indian companies and cash
Isa link: Yes
Charges: Initial 5.25%, annual 1.5%
Commission: Initial 3%, renewal 0.5%
Tel: 020 7562 3386
The Elite t1ps India Fund aims for growth by investing mainly in the equities of small and medium sized Indian companies.
Assessing the merits of an India fund, Michael Philips proprietor Michael Both says: “India is an exciting emerging market and is frequently compared to China. The Chinese economy is famed for its efficient infrastructure and in many respects business friendly attitude. But in stark contrast to India, the latter’s demographics are significantly more favourable and it can be argued that India has greater long term potential.”
Both points out that the fund will invest primarily in the shares of companies that are traded, listed and/or dealt in on a regulated market in the Indian sub-continent. It can also invest in instruments issued by companies established, operating or having a predominant part of their economic activities in the Indian sub-continent that are listed, and or dealt in, in eligible markets worldwide.
Turning to the less attractive features of the fund, Both says: “There are many excellent reasons to invest in India, but the launch documents for the t1ps India fund do not give nearly enough details to justify why investors should entrust their savings to this new and, in respect of India, apparently largely inexperienced team.
“As t1ps quite properly warns potential investors, the underlying companies may not be subject to the same accounting, auditing, and financial reporting standards or subject to the same level of government supervision and regulation as in more developed countries. It should be noted that the level of liquidity may also differ to that of the UK equity markets.”
Both says that as an investor, he would want a manager who has had years of experience in that market, but this does not seem to be on offer here.
“Ultra impressive Anthony Bolton still got caught out by irregularities in Chinese companies even with mighty Fidelity’s superb research infrastructure behind him, which suggests the relatively lightly-resourced t1ps team might struggle to identify similar situations in their target smaller Indian companies, especially since it only plans to open a Mumbai office in 2012.
“We are given no details of the new fund manger it plans to base there but the press release seems to imply that it has not recruited anyone local. Perhaps t1ps will clarify that point.”
Discussing the main competitors, Both says: “There are three established open ended funds, First State Indian subcontinent, Neptune India and Jupiter India, plus two closed ended ones. “
Summing up, Both says: “The t1ps Investment Management team has demonstrated ability in the small and unquoted sectors of UK regulated markets but we are only given vague hints as to the management’s familiarity to the sub-continent. For investors with a high tolerance to risk this new launch could be a punt they are prepared to take. “
Suitability to market: Good
Investment strategy: Good
Adviser remuneration: Average