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 Reports and Commentary from the Investment World

Reports and commentaries are posted here on a regular basis.


J.F India Fund.


Jardine Fleming India Fund 2005-01-14

Gain exposure to the India market, with a fund that has an average annual return of 21.8% per annum for the last 5 years.

The Indian market has been one of the best performing of the emerging markets in the last two years, but despite the recent stellar performance of the market, we remain bullish on its prospects in the long term and still see it as an exciting investment opportunity.
The strong performance has been driven by exceptional liquidity flows, particularly from foreign investors, who have invested US$ 3.8 billion during the last year.
Domestic mutual funds, who have been raising money from local investors, also invested US$ 1.3 billion.
Fundamentals continued to be supportive, with the economy growing strongly in the financial year 2004.

The industry and services segments of the economy led the surge in growth. Many International companies have out sourced their service departments to India, because of their well educated English speaking work force. Labour costs are cheap by comparison to the UK or USA.

Jardine Fleming has had a long association with India going back to the time of the Raj. It is important to find fund managers with a long track record, particularly when you are investing into an emerging market.. The JF India fund has such a track record and has enjoyed excellent returns in the last 5 years, averaging growth of 21.8% per annum (annualized over last 5 yrs). The fund managers are the experienced team of Edward Pulling and Rukhshad Shroff.
The fund has in excess of US$ 1771 million under management.

The fund’s aim is:
To provide long-term capital growth by investing primarily in Indian securities and in companies which derive the predominant proportion of their revenue from the Indian sub-continent. A subsidiary wholly owned by JPMorgan Funds, may be used to facilitate an efficient means of investing.

This single-country fund invests exclusively in India, aiming to capitalise on the investment opportunities that exist in companies from this fast growing market.

India is considered to be the software ‘centre of excellence’ for Asia and has emerged as a relocation site for global companies’ help desk functions, who are drawn by the country’s English-speaking skills and lower labour costs.

Investors benefit from active management at the stock level as JPM typically looks to capitalise on in-house stock selection expertise within·
The fund is suitable for investors looking to enhance investment returns through a concentrated exposure within this region.

Last year the fund returned 32.2% and in 2003 it returned a staggering 88.1%. We may not see these returns repeated in 2005, but we are expecting in excess of 20%.

The Top Ten holdings are as follows:

  • Infosys Technologies 8.2%
  • Bharat Heavy Electricals 6.9%
  • Larsen & Toubro 5.4%
  • Wipro 4.2%
  • Associated Cement 4.2%
  • Bharti Televentures 4.2%
  • Satyam Computer Services 4.0%
  • ITC 3.8%
  • Reliance Industries 3.8%
  • Mahindra & Mahindra 3.6%

Buy the JF India fund up to US$80.


Disclaimer: All the information above is provided as a service for individuals and institutions. It should in no way be construed as a recommendation as an investment. Investment decisions should be based on the risk tolerance and planning horizon of the investor. Market participants must understand that past performance is also not a guarantee or predictor of future results.