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By John Ewart, fund manager at Aubrey Capital Management, a specialist global manager located in Edinburgh and London. A Portfolio Manager's Q&A
You have strongly overweighted India and slightly underweighted China compared to the MSCI EM Index. Why?
At Aubrey, we have had approximately a third of our GEM fund invested in India since 2014 when the transformational Modi government took charge. India has a number of positive factors supporting economic and corporate growth, such as positive government policies, ideal demographics, urbanisation accelerating, and an increasing middle-class consumer base. It also has some very well-managed, high-return growth companies to invest in, and many of these have competed with multi-national companies for decades. It will be the world's 3rd largest economy in the next few years and we argue that any Asian or Emerging Market Fund should have a significant exposure to India.
It is important to note that we invest in companies, not countries. Our Indian exposure is high because we have found companies there that meet our strict investment metrics. Similarly, we have more caution toward China at present, but we invest in excellent companies with significant cash generation and growth prospects rather than targeting a slightly underweight position in China.
Many successful companies have been started by enterprising people who did not enjoy government support, and who are wary of political interfere...................... To view our full article Click here
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