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The best India stock funds

The basis of the development is an economic reform process initiated in 1991, which has brought a number of highly profitable global companies into the focus of international investors. India fund managers are convinced that the potential is still great: By 2050, India should be directly behind China and the US in terms of GDP growth.

India's top 5 equity funds: HSBC at the top

The top India equity funds have achieved an average annual performance of between 20.29 and 24.81 percent over the past five years. However, they were also unable to escape the global negative trend and since the beginning of the year had to accept price losses of between -34.04 and -39.22 percent. The best Indian fund in the ranking based on the five-year Sharpe ratio is HSBC GIF Indian Equity. Fund manager Sanjiv Duggal is currently focusing primarily on three sectors: raw materials, technology or telecommunications and industry. Accordingly, Jindal Steel & Power, Wipro and HCL Technologies are among the largest positions in the portfolio with shares of 7.6 percent, 6.7 percent and 4.6 percent. Duggal prefers to invest in large and liquid companies. The values ​​are searched for on the basis of top-down analyzes, which are combined with bottom-up research.

2nd place goes to AllianceBernstein-Fonds

Immediately behind the HSBC fund is Bernstein-India Growth in the Alliance's e-fundresearch ranking. The fund manager in charge has been Samir Arora since 1993, who, according to his own statements, prefers to select companies from the infrastructure sector. Another focus is on companies involved in the privatization of the public sector. The current top position in the fund is Reliance Industries with a portfolio share of 10 percent - a company that is active in the petrochemicals and textiles sector. The second largest figure is Infosys Technologies, the number two in the Indian software industry after market leader Tata Consultancy with 6.31 percent. Only at the end of last week did the company announce its intention to take over the British software house Axon. Background of the acquisition: Falling sales in the USA and the hope of being able to gain a foothold in the European market.

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Jupiter: good profits and attractive valuations

JGF India is in third place in the ranking according to the Sharpe ratio over 5 years. Avinash Vazirani, Jupiter Asset Management, manages the fund with a "bottom-up GARP (growth at a reasonable price) investment approach". The portfolio comprises around 50 stocks that are diversified across all sectors. The fund was launched in August 1995 - and - like all other top 5 funds - has a long track record.

Avinash Vazirani: "In the next three quarters, some domestic oil and gas projects will start delivering, reducing dependency on energy imports and world market prices. Food inflation will be mitigated by increased wheat and rice production. After the price declines in recent months, valuations are at their lowest level in five years. There are very good buying opportunities because we are seeing strong earnings figures in our portfolio companies. "

DWS India: More defensive values ​​preferred

Robert Kalin, manager of DWS India, currently prefers more defensive stocks like Consumer Staples and Telekom. In contrast, real estate and consumer discretionary are underweighted. The expert assumes a slight downturn in the Indian economy until next year. The GDP growth could decline to seven percent. "However, this is not a major catastrophe, although a few years ago it took a long time before the seven percent limit could be broken," said Kalin in an interview with e-fundresearch. The high rate of inflation has also been a major problem in India over the past six months. "However, we assume that the situation will stabilize towards the end of the year - with the exception of a few outliers," said Kalin. The oil price, which has recently fallen, is helpful here. This should also relieve the government, which has helped poorer sections of the population with subsidies.

Are investors withdrawing from the market?

The elections scheduled for next May could cause some surprises. Immediately after the last election, the stock market lost 11 percent in just one day. "The unexpected success of the communists has frightened many investors," said Kalin. The DWS fund manager considers it not unlikely this time that some investors will withdraw from the market shortly before the election date. Kalin hopes that the new government will give the reform process, which has recently stalled, a fresh impetus. As is well known, the minority government led by Prime Minister Manmohan Singh was unable to find a majority in parliament for many important projects such as the privatization of state-owned companies.

India in balance?

Kalin sees the balance of the Indian economy as an advantage over other emerging countries such as Russia and Brazil. For example, raw material and energy stocks play a much smaller role here, with a share of around 20 percent in the MSCI India. Almost 30 percent of the index is in financial stocks, and 15 to 18 percent in the IT sector. The pharmaceutical sector is also comparatively strongly represented with around six percent. "In India, the proportion of high-quality, knowledge-based services is very high," says Kalin, summarizing the difference. That is also the decisive argument for investing in India. "Indian companies from the IT and pharmaceuticals sectors can compete with the best in the world across the value chain," said the American. There is still a lot to catch up. India's GDP per capita remains the lowest of any major emerging market.

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