India is all the rage these days. Flows into Indian equity funds have risen over the past few months in Latin America, led by the Chilean AFPs, and optimism over the country’s growth potential is only gaining pace.
One of the speakers at our Citywire Latin America event, global economist Mario Weitz, described the country as the ‘star’ investment of the year and that Europeans were also clambering to get on the Indian growth train.
Over the past three years the Nifty 500 has risen over 26% and local Indian asset managers have greatly outperformed the market with funds that have specialized in particular opportunities within, for example, small and mid caps as well as growth stocks.
During that period, of the 139 fund managers tracked by Citywire in Indian equities the average manager performance was just over 38%.
Of the top performing managers only a handful achieved returns above 70%. Below are the three best returning managers over the past three years.
- Funds: Mirae Asset Tax Saver Fund Growth/Mirae Asset India Opportunities/Mirae Asset Emerging Bluechip
- Three year returns: 73.3%
Kicking off our top three ranking is Citywire AAA-rated manager Neelesh Surana. He runs three funds within our analysis and he has the longest tenure on the India Opportunities fund, which he’s been running since 2008.
This fund’s largest sector bet is toward financials and accounts for over a third (34%) of its total portfolio. While a large bet it is in fact a fairly neutral position when compared to its benchmark and to find the fund’s top overweight you need to look at industrials (10%), which is almost double the benchmark’s allocation.
Its next largest positions are in basic materials and consumer cyclicals at around 12% each. Unsurprisiingly his two largest are in banks, HDFC Bank and ICICI Bank, and his third biggest is auto group Maruti Suzuki India.
- Funds: DSP BlackRock Small and Mid-Cap Growth/DSP BlackRock Micro Cap Growth
- Three years returns: 73.4%
Citywire AA-rated Vinit Sambre manages funds for a local Indian firm DSP, which entered a joint partnership with the world’s largest asset manager BlackRock a few years back.
Looking at his Small Mid Cap fund, Surana has taken a different approach compared to the other two managers present in this ranking. While financials is a large position within his fund at 26.5% it is his allocation to consumer cyclicals that dominates his fund at 27.4%.
Both are overweight while he also has a smaller overweight bet in basic materials that account for 18% of his sector allocation.
Among his top holdings are The Federal Bank, auto group Ashok Leyland and auto supplier Exide Industries.
- Funds: Motilal Oswal MOSt Focused Multicap 35 Growth/ Motilal Oswal MOSt Focused Long Term Growth/Motilal Oswal MOSt Focused 25 Fund Growth.
- Three year returns: 92.5%
In first place is a fund manager from local Indian group Molital Oswal. Sinha Roy runs a number of funds with his largest being the $1.2 billion Most Focused Multicap 35 fund.
In this fund Sinha Roy has an even larger position than Surana in India’s financial sector with almost half his fund invested in this theme. He has split his allocation into financial services at 24% and banks at 21%.
His third largest allocation is toward oil products at 14% with the auto sector accounting for 13%. He shares the same top two positions as Surana with HDFC Bank and Maruti Suzuki topping his holdings list.