Fund Research

Aberdeen New India

Last update 20 August 2019

Disclosure – Non-Independent Marketing Communication

This is a non-independent marketing communication commissioned by Aberdeen New India. The report has not been prepared in accordance with legal requirements designed to promote the independence of investment research and is not subject to any prohibition on the dealing ahead of the dissemination of investment research.

Investment objective

To achieve long-term capital appreciation by investing in companies which are incorporated in India or which derive significant revenue or profit from India, with dividend yield from the company being of secondary importance.

As at:

16/08/2019

Group/Investment

Aberdeen New India

Ticker

ANII

Management Company

Aberdeen Asset Management (Part of Aberdeen Standard Investments)

Manager Name

Kristy Fong; Adrian Lim; Flavia Cheong; Hugh Young; Pruksa Iamthongthong;

Association of Investment Companies (AIC) Sector

Country Specialist: Asia Pacific ex Japan

12 Mo Yield

0.0%

Dividend Distribution Frequency

None

Latest Market Capitalisation

£276,448,255

Latest Net Gearing (Cum Fair)

5%

Latest Ongoing Charge Ex Perf Fee

1.17%

Turnover Ratio

17.5%

Shares Outstanding

59,070,140

(Discount)/Premium (Cum Fair)

-12.3%

Daily Closing Price

468p

Source: Morningstar

Aberdeen New India owns a concentrated portfolio of stocks in India which are selected for the high quality of their financials and corporate governance. The trust draws on the research of a team of Asia-based managers led by Kristy Fong and James Thom with deep knowledge of the market and a differentiated approach developed over many decades of Aberdeen’s presence in the region.

Their analysis aims to uncover those companies which can sustainably grow their earnings and which should beat the market over the course of an investment cycle, with the focus on quality and repeatable earnings rather than cyclical winners having led to particularly strong performance in down years.

The trust offers exposure to the huge domestic market in India which is growing thanks to favourable demographics, with significant exposures to consumer staples companies and financial services companies which are rolling out services to the growing middle class.

The trust has outperformed the market handsomely over the past five years, with NAV total returns of 94.5% compared to the MSCI India’s returns of 70.3%. The vast majority of this is due to stock selection rather than industry allocation; a validation of the bottom-up approach the team takes.

In mid-2018 the managers took out a gearing facility which allowed them to take advantage of the cheap valuations in India in the second-half sell-off. They remain modestly geared at 4%, but in line with their cautious approach are unlikely to gear up further unless significant value emerges, such as another market sell-off.

The discount is at 12.3%, having come in substantially since Modi won re-election in May. However, it still remains wider than the average emerging markets trust, which trades on a discount of 8.4%.

The trust hasn’t paid a dividend since 2005, and is unlikely to do so this year, with the managers focused entirely on capital growth.

Thomas McMahon

Disclaimer

This report has been issued by Kepler Partners LLP.  The analyst who has prepared this report is aware that Kepler Partners LLP has a relationship with the company covered in this report and/or a conflict of interest which may impair the objectivity of the research.

Past performance is not a reliable indicator of future results. The value of investments can fall as well as rise and you may get back less than you invested when you decide to sell your investments. It is strongly recommended that if you are a private investor independent financial advice should be taken before making any investment or financial decision.

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Fund History: Aberdeen New India

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