Fund Profile

Disclaimer

This is a non-independent marketing communication commissioned by abrdn. The report has not been prepared in accordance with legal requirements designed to promote the independence of investment research and is not subject to any prohibition on the dealing ahead of the dissemination of investment research.

Overview
A new version of this profile is available. View Latest
Overview

Aberdeen New India (ANII) owns a portfolio of high-quality Indian equities chosen for their strong balance sheets, sustainable earnings and good governance. These characteristics have helped it outperform its peers over the long run by, amongst other things, delivering relative outperformance in periods when the market falls (see Performance).

ANII is managed by Kristy Fong and James Thom of the ASI Asian Equities Team. While their portfolio is typically more expensive than the market, they look for opportunities where they think future growth is being undervalued, aiming to add alpha by being longer-term in their thinking. Their own valuation of a company is critical in defining acceptable entry and exit prices, on which they tend to be disciplined. As a result, the portfolio is fairly well spread across sectors and styles – this is neither a growth nor value proposition. During the pandemic, the exposure to new economy businesses has risen thanks to the opportunities being thrown up by volatile markets. We expect the portfolio to continue to see a better spread of old and new economy sectors (see Portfolio).

Stock selection is built on the detailed bottom-up analysis of the large team of analysts and portfolio managers based in Asia. They look for companies with a position of market leadership which should allow them to grow faster than peers over the long run. The team view strong corporate governance as an important characteristic of a quality company (see ESG), and it is a key issue in determining whether they invest.

Kristy and James use gearing tactically, and are currently running net gearing of c. 7%, indicating cautious optimism. ANII’s shares currently trade 13.6% below NAV, slightly wider than their five-year average.

Analyst's View

We think the long-term fundamentals are pretty exciting for India. Speaking to Asia fund managers, it is striking that India repeatedly comes up as an opportunity. Its demographics are stronger than China, its labour is cheaper than China, and it is winning business from multinationals concerned about exposure to China. The reforms implemented by the Modi government have also had a real impact. India has been one of the top ten improvers in the World Bank’s Ease of Doing Business Rankings for three consecutive years.

That said, we may be entering a more difficult period for the global economy now that optimism on the vaccine rollout has potentially moderated. With the pandemic far from over and with government support schemes winding down, we think the pressures on individual companies will be significant. For investors wanting exposure to India, this could be a good environment to have exposure to high quality companies via a strategy such as ANII. A focus on quality has meant the trust has lagged in 2021 to date, but we think quality characteristics may soon be in high demand as the strongest companies prove able to weather tough times and steal market share. Kristy and James think the outlook is very good over the next two to three years, but recognise there are potential stumbling blocks for Indian equities along the way.

ANII’s discount of 13.6% is wide in absolute terms but close to its five-year average. However, India has rarely been in favour during this period. While we recognise single country trusts may deserve a slightly wider discount than more diversified ones, we think this could prove to be a good entry point if our optimism about India’s future proves to be justified.

Bull bear
Strong long-term record of outperformance based on successful stock-picking
Gearing can magnify market falls as well as gains
Quality approach has provided resilience in weaker markets
As a single-country emerging markets fund, it has political risk and higher volatility than a more broadly spread trust
Discount is wide and could be an interesting long-term entry point
Outperformance of Reliance Industries (not held) would be a relative headwind
Continue to Portfolio

Fund History

30 Mar 2022 You say tomato…
Do it yourself or put it into a global fund and leave it to the experts - our analyst debate the merits of each approach...
01 Feb 2022 Fund Analysis
ANII aims to invest in world-class, well governed companies at the heart of India’s growth…
13 Oct 2021 Beyond the Middle Kingdom
As momentum falters in the emerging markets powerhouse, we examine the options for investors outside China...
28 Jul 2021 Fund Analysis
ANII offers exposure to exciting growth stories in India…
21 Jan 2021 Fund Analysis
ANII is the top-performing India trust over five years…
07 Oct 2020 Five ways to play Indian equities
India is struggling economically – but could there be a value opportunity in the stock market?
09 Sep 2020 Fund Analysis
ANII’s quality characteristics could stand it in good stead in a weak economic period…
05 Mar 2020 Don't panic: the case for investing in Asia this ISA season
We examine the relationship between stock market and GDP growth, before debating the case for an allocation to Asia...
26 Feb 2020 Fund Analysis
ANII is the top-performing Indian trust over the last five years…
16 Jan 2020 Drifting apart: how emerging markets have become less correlated
We examine how correlations between different emerging markets have evolved, and whether single country strategies could diversify returns going forward....
28 Aug 2019 Quality street: can the dominant style continue to outperform?
For several years, quality as an investing style has dominated, outperforming both value and growth. We examine why the case for quality remains strong and the importance of taking an active approach…
20 Aug 2019 Fund Analysis
Aberdeen New India buys high quality stocks exposed to the fast-growing Indian economy….
12 Dec 2018 Fund Analysis
The trust has outperformed the market handsomely over the past five years thanks to strong stock selection...
View all

Welcome to Kepler Trust Intelligence

Kepler Trust Intelligence is authorised in the UK by the Financial Conduct Authority.
Please enter a valid email address
{{item.msg}}
Please enter a valid password
{{item.msg}}
Please enter a valid email address
{{item.msg}}
Please check your email. If an account exists you'll be sent instructions on how to reset your password.
Kepler Trust Intelligence is authorised in the UK by the Financial Conduct Authority. To ensure that we are able to provide content which is appropriate for you, please tell us a little about yourself.
Please choose an option
{{item.msg}}
Please enter a company name
{{item.msg}}
Please enter a location name
{{item.msg}}
Please choose an option
{{item.msg}}
Please enter a platform
{{item.msg}}
Please choose an option
{{item.msg}}
Please enter a trust
{{item.msg}}
?
The information contained herein is not for distribution and does not constitute an offer to sell or the solicitation of any offer to buy any securities in the United States to or for the benefit of any United States person (being residents of the United States or partnerships or corporations organised under the laws thereof). The investment funds referred to herein have not been registered in the United States under the Investment Company Act of 1940 and units or shares of such funds are not registered in the United States under the Securities Act of 1933.
Please confirm
{{item.msg}}
Please select an option
{{item.msg}}
See benefits
A free Kepler Trust Intelligence account allows you to access premium content including the ‘Kepler View’ – our verdict on the trusts we cover – and historical research so you can see how our view has changed over time. An account also unlocks useful facilities like the ‘follow’ button which lets you keep track of the trusts you’re interested in and as a logged in user you can also download PDFs of our research, and choose the layout of the page you’re reading to suit your preference. We will not share your details unless you give us permission to do so, and we won’t bombard you with emails – we only send one a week.
Please select an option
{{item.msg}}
Please enter your first name
{{item.msg}}
Please enter your last name
{{item.msg}}
Please enter a valid email address
An account already exists with this email - have you forgotten your password?
{{item.msg}}
Please enter a valid password
{{item.msg}}
Please enter a valid password
{{item.msg}}
How will this information be used? Your answers help us to tailor our content to relevant investment trusts, and to ensure that the asset allocation and portfolio strategy research we produce is appropriate to our userbase.
Our Website uses Cookies Cookies are small text files held on your computer. They allow us to give you the best browsing experience possible and mean we can understand how you use our site. Some cookies have already been set. You can delete and block cookies, but parts of our site won’t work without them. By using our website you accept our use of cookies. For further information please refer to the Kepler Privacy Notice.
Need help?

One more thing...

Did you know, you can 'follow' individual trusts on Kepler Trust Intelligence? Use the functions below to set up alerts and we'll send you research and updates on your chosen trusts.

Suggested trusts to follow

Browse all funds
Need help?
Current Site Kepler Trust Intelligence is produced by the investment companies team at Kepler Partners and is the UK’s premier source of detailed qualitative research on investment trusts. Absolute Hedge is a market leading UCITS research database providing proprietary research on funds, themes and strategies in the UCITS space. Kepler Liquid Strategies is a Dublin domiciled UCITS fund platform featuring a number of best-of-breed fund managers. Kepler Partners is a corporate advisory and asset raising boutique specialising in the regulated funds market in Europe and investment trusts in the UK.