This Luxemburg-based Sicav aims for growth by investing at least 70 per cent in Indian equities and equity-related securities. It was established in April this year and was seeded with assets from the MLIF India fund as the two funds merged.
The fund is managed by Naganath Sundaresan, president of of DSP Merrill Lycnh Fund Managers, Merrill Lynch’s Indian venture.
Sundaresan has over 16 years’ experience in investment management, He has also worked as a portfolio manager for Merrill Lynch Asset Management. In addition to the support from the six-strong Indian investment team in Mumbai, Sundaresan can also draw on Merrill Lynch’s global resources.
The fund aims to outperform in different markets, and Sundaresan has the flexibility to switch between growth and value depending on market conditions. Although the fund has around 70 holdings, it is fairly concentrated, with the top 10 stocks accounting for more than 35 per cent of the portfolio
Although there is a bias towards big companies and mid cap, the fund can invest in small caps. It will favour companies with a competitive advantage relative to their peers, transparency of management and the potential to deliver strong earnings growth.
The Indian story is well known, particularly as an element of Bric portfolios. Investors may already be aware of the region’s rapid economic growth as a result of factors such as outsourcing and increasing domestic consumption.
However, India is an under-researched market and the importance of local knowledge cannot be underestimated. This fund may benefit from having a team based on the ground rather than an office in London, but pure exposure to India lacks the diversity of a general emerging markets fund.