There are good reasons why the Indian stockmarket is attractive. On the demographic front, it has a big emerging middle class and India’s population is one of the youngest in the world, with its under-25s representing a quarter of the world’s youth.
Many of these young people are highly skilled and largely English-speaking and yet are paid much less than in most other countries.
The economy is growing by more than 9 per cent a year and is expected to accelerate even further over the next five years. Government expenditure on improving the country’s infrastructure is being increased enormously.
The stockmarket is very under-researched and there are many strong businesses that do not get the kind of attention that they might in other markets. This makes it an excellent market for stockpickers.
This is where the manager of the Jupiter fund, Avinash Vazirani, comes in. He recently joined Jupiter and launched the new fund in February. He has been investing in Indian equities for over 13 years and has been managing or advising the Peninsular South Asia Axis fund since July 1995. The fund has risen by over 1,400 per cent compared with the Indian market average of around 700 per cent.
Vazirani never invests in a company unless he knows the management well and only buys companies with significantly undervalued assets and will hold big positions in these companies as long as he considers their growth prospects to be not fully reflected in the market.
This fund should form part of all bigger growth portfolios and I expect Vazirani to outperform the Indian market generally by a big percentage.