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To see true potential you need to look at things differently.

INDIA

A different perspective

Rising incomes and under-penetrated categories provide attractive investment opportunities in India.

As disposable incomes have grown, we find that Indian consumers are now moving up the ladder to buy more premium products, or buying discretionary products they could not previously afford. We believe the premiumisation trend is likely to occur across different categories."

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Meet the manager

A short insight into how Vinay Agarwal, Director, thinks about life and investing.

About the strategy

A behind-the-scenes look at the investment philosophy for the India Subcontinent investment strategy.

Investment insights

Is India still an attractive investment destination?

Corporate India’s resilience has been severely tested over the past decade. Since 2010, there has been a long, drawn-out downturn, caused by a series of corruption and scams, a banking and financial crisis, and now a devastating health pandemic.

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India: Backing good people running good businesses is the key

From our discussions with companies in the FSSA Indian Subcontinent equity strategy, it is clear that they are well-positioned to deal with the impact of the second wave of the virus on their businesses.

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How we invest

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Bottom-up and absolute return* mindset

The region offers a broad and attractive investment universe for bottom-up stock selection. The strategy is focused on capital preservation and generating absolute returns while being benchmark agnostic.

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High conviction investments

A focused portfolio of 30 to 40 companies ensures that only the highest conviction investment ideas are included.

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Integrated ESG analysis

ESG analysis, shareholder engagement and proxy voting is fully integrated into the investment process.

Investment themes

FSSA’s Indian Subcontinent equity portfolios are built company by company from the bottom up, with little regard for index positioning.  We are focused on growth in an absolute return sense and construct portfolios of high quality companies with effective management teams, long-term, sustainable growth drivers and strong financials. With low penetration rates for goods and services, and barriers to entry which protect profits and cash flow, the leading companies in the region have a good track record of compounding earnings and creating long-term value for stakeholders.

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Aspirational consumer base

Favourable demographics and under-penetrated categories, lead to well-positioned consumer franchises generating high Returns on Capital Employed (ROCE). Dominant franchises will keep gaining market share as the markets formalise as well as premiumise over time.

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Financial inclusion

We believe well-managed private banks should continue to benefit from greater penetration of financial services across India. They should continue gaining market share at the expense of poorly run and under-capitalised state-owned banks.

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Infrastructure improvement

With greater need for better quality infrastructure as the country develops, we believe that suppliers, such as paints and cement companies, will benefit. Well-run companies in these industries typically generate high returns and have low debt compared to infrastructure asset owners.

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Undiscounted change

We pay close attention to changes in management and ownership, in inherently attractive businesses undergoing temporary periods of difficulty. This can often lead to meaningful transformations, generating significant value for shareholders.

^ Active share is a measure of the percentage of stock holdings in a portfolio that differs from the benchmark
* Absolute return is the return that an asset achieves over a specified period