Ashoka India Equity (AIE)

After trading at a premium for much of its existence, Ashoka India Equity (AIE) has slipped to a rarely seen Discount this calendar year, despite the excellent long-term performance of the trust in both absolute and relative terms. This strong record has been driven almost entirely by the well-resourced Management team’s stock selection focus, which has generated considerable alpha from the smaller companies in the market. In the near term, this small-cap bias has been less supportive as volatility has hit markets, which has been particularly impactful for active managers. However, AIE has significantly outperformed its peer group over both the short and long term, leading to the trust being awarded Kepler’s Growth rating for 2026.

Whilst the near-term environment has been more challenging, the trust’s management team believe many of the issues show signs of abating. They note that earnings revisions appear to have stabilised and that India’s valuation premium is back in line with long-term averages. Furthermore, they argue that the macro issues the country has faced are temporary, and that incremental news is increasingly positive (see Performance).

That said, the managers remained heavily focussed on bottom-up stock opportunities, using the size and experience of their locally based analyst team to filter through the large universe for the best opportunities. In the past year, the IPO market has provided a good source of new ideas, with stocks from the consumer discretionary, healthcare, and industrials sectors providing compelling options (see Portfolio).