The fund will hold around 60 stocks with a preference for medium and big companies to ensure the fund remains liquid. It will invest in companies that are attractively valued and look likely to provide growth at a reasonable price.
The fund is managed by Avinash Vazirani, who joined Jupiter last July. Vazirani has more than 12 years investment experience in managing emerging market equities. He founded Peninsular Capital Partners in 2005, an investment firm focused on managing Indian equities. Vazirani manages the Peninsular South Asia access fund, for which Jupiter in Bermuda acts as investment adviser. Prior to founding Peninsular, he was chief investment office, South Asia and Africa, for BNP Paribas.
Vazirani will look for stocks where the growth potential is not reflected in the share price. He also invests in deep value stocks where a catalyst for change is likely.
As a high conviction manager, Vazirani is prepared to take bigger positions in his preferred stocks. He takes a long-term approach and is happy to run with his best ideas for years, as long as he feels that the growth potential is still not fully reflected in the share price.
Many of the companies Vazirani invests in are investing heavily in their businesses, so cashflow and dividend growth are not helpful to him when selecting stocks. Instead he will look at profit growth – as a trained accountant, he is able to read between the lines of company accounts.
According to Jupiter, India is a strong investment story with growth being driven by domestic consumption and the growth in services, high levels of foreign investment and increased spending on infrastructure, not just the export market. The emergence of an educated and skilled middle class who are earning, spending and saving more is seen as another factor that will ensure growth is sustained.
India is under-researched with modest analyst coverage, so there are many strong businesses that do not get much attention. Volatility has also driven down prices, leading to opportunities to buy bargains among quality companies.
However, this fund has a narrow geographical focus, which increases the risk for investors. Some investors may like this fund because it allows them to asset allocate to India, while others may prefer broader exposure through a Bric or emerging markets fund which also includes other regions.