Equities
Why China over India?
William Lam, Co-Head Asian & EM Equities shares insights from the team on why they believe there is a contrarian opportunity in being overweight China and underweight India.
April 8, 2024
Introducing the Invesco India Equity Fund
An active fund of around 70 companies featuring quality growth characteristics in the fastest growing large country in the world.
India’s future growth
We believe India’s future growth will be driven through three major secular growth trends:
Financial transformation
India has undergone a digital transformation. In 2022, it emerged as the global leader in digital payments.
Consumption explosion
India is experiencing a remarkable surge in consumption, driven by an increasingly affluent population.
Manufacturing renaissance
India is actively bolstering domestic production, driving export growth, and simultaneously diminishing its dependence on imports.
Multi-year growth opportunity
India is one of the strongest growing economies in Asia, driven by digital transformation, robust consumption and expanding exports.
Strong demand outpacing supply in manufacturing and consumer discretionary sectors is resulting in improving pricing power and stronger earnings growth, supporting equity market valuations.
Over the last decade, Indian corporations managed their balance sheets well. This will help them to capitalise on expected demand led growth that is underpinned by the country’s rising middle class.
Transcript
Why consider investing now?
India is emerging as the new leader of economic growth in Asia, surpassing China. With India’s 2023 GDP at 2007 China levels, we believe the country’s growth trajectory may well resemble China’s.
Why this fund?
This actively managed fund is positioned to benefit from India’s strong economic growth, and in particular from the underlying secular growth trends, by investing in corporations that exhibit ‘quality growth’ features. These are companies with strong management, sustainable earnings growth, flexible cost metrics, a strong balance sheet, a strong brand as well as significant market share.
Fund manager Shekhar Sambhshivan has managed the fund since 2006 and leads a highly consistent and experienced team.
The investment team considers sustainability throughout the investment process, from stock selection to periodical portfolio review processes. The fund is SFDR Article 8 classified, while many peers are not.
Investment risks
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For complete information on risks, refer to the legal documents. The value of investments and any income will fluctuate (this may partly be the result of exchange rate fluctuations) and investors may not get back the full amount invested. As a large portion of the fund is invested in less developed countries, you should be prepared to accept significantly large fluctuations in the value of the fund. As this fund is invested in a particular country, you should be prepared to accept greater fluctuations in the value of the fund than for a fund with a broader investment mandate. The fund invests in a limited number of holdings and is less diversified. This may result in large fluctuations in the value of the fund.
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Fund facts
The fund manager Shekhar Sambhshivan has been managing the fund since 2006 through various market cycles. The fund has an AUM of more than USD 500m and an investment approach that is focused on corporations featuring quality and growth characteristics.
Invest in the fastest growing large country in the world
Capitalise on strong position in the Indian equity market
Benefit from active, quality-growth-led investing
Access more Asian and Emerging Markets investment solutions
FAQs
Favourable Market environment:
An investment in Indian equities can capitalise on falling yields, stable oil prices and controlled inflation.
Well positioned for a big reset of global dynamics:
India benefits from a big global reset with dynamics shifting from China to India.
Reforms and initiatives benefitting local businesses:
India’s government-initiated improvements in the country’s infrastructure, reforms around corporate taxes and manufacturing, and the country’s ambitious renewable energy targets should bode well for corporate India’s growth prospects.
Favourable demographics:
The share of India’s working age population to total population is projected to reach its highest level by 2030. With a relatively young population, India not only gets a competitive advantage in terms of workforce but also an opportunity to unleash the consumption power of a young population. (Source: EY, April 2023).
India’s economic growth stands out on the global stage. We currently see opportunities specifically in three secular growth trends which are (1) financial transformation, (2) consumption explosion and (3) manufacturing renaissance.
SFDR is the acronym for Sustainable Finance Disclosure Regulation and its main purpose is to reorientate capital towards more sustainable businesses and increase transparency on sustainability among financial institutions and market participants.
The SFDR article 8 classification applies to funds promoting environmental and social objectives and which take more into account than just sustainability risks as required by article 6.
You can invest in the Asian and emerging market stock markets by investing in actively managed mutual funds or exchange traded funds (ETFs). Invesco offers a broad range of actively managed funds and ETFs.
How can we help?
Let us know using this form and one of our specialist team will quickly get back to you.
Important information
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This marketing communication is for Professional Clients only and is not for consumer use. Data is as at 29/02/2024 and sourced from Invesco unless otherwise stated. This is marketing material and not financial advice. It is not intended as a recommendation to buy or sell any particular asset class, security or strategy. Regulatory requirements that require impartiality of investment/investment strategy recommendations are therefore not applicable nor are any prohibitions to trade before publication. Views and opinions are based on current market conditions and are subject to change. For information on our funds and the relevant risks, refer to the Key Information Documents/Key Investor Information Documents (local languages) and Prospectus (English, French, German, Spanish, Italian), and the financial reports, available from www.invesco.eu. A summary of investor rights is available in English from www.invescomanagementcompany.lu. The management company may terminate marketing arrangements. Not all share classes of this fund may be available for public sale in all jurisdictions and not all share classes are the same nor do they necessarily suit every investor.
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