Frankfurt am Main, February 7 2016
Gaining the chances of the Indian stock market with a value approach
Evolving middle class and reforms are making India an attractive investment region
Focus on corporates with a long-term business model and good Corporate Governance
With Siddharth Mehta-Thomas and Krishnaraj Venkatraman, two outstanding India specialists have been taken on board to support the stock picking. Mehta-Thomas, who founded Beaconsfield Investment Management in 2010, and Venkatraman combine more than 30 years' local investment experience, are well acquainted with the markets and local political conditions, and are familiar with the cultural background. "India already has 635 stock corporations with a market capitalization of more than EUR 100 million. Due to the difficulties for foreigners to access the market, value pearls are still to be found there", claims Mehta-Thomas.
As Dr. Hendrik Leber, Managing Partner of ACATIS, "ACATIS India Value Equities aims to profit from the high growth potential of the Indian economy". At the moment, India's gross national product is the fastest growing among the major economies. A large number of multinational firms is listed in India and have created more prosperity than local companies. Some of the largest German companies are also invested in India. The sub-continent's economy is also profiting from continuous direct investment, with 29.9 billion US dollar having flowed into India from the EU alone between 2010 and 2013.
The country's evolving middle class together with the reform-oriented government are making India one of the currently most attractive investment regions worldwide. Household incomes are expected to rise. ACATIS assesses the sector opportunities as currently higher than in China. The percentage share of mortgages and private debt relative to gross national product are low compared with the USA or Germany. The per capita energy consumption is also comparatively low as is general car ownership. The catch-up development expected to derive from this signals great potential for many companies.
The ACATIS India Value Equities is primarily intended to hold shares in Indian companies, either directly or through indirect instruments such as ADR/GDR (American Depository Receipts/Global Depository Receipts). These indirect instruments are chosen due to the ongoing challenges buying shares at the Indian stock exchange, despite liberalization. When making the selection of stocks, special focus is placed on the management, corporate governance and capital allocation decisions of the companies. Companies are sought with long-term business models that also generate a lastingly strong return on investment and free cash flows. The selection method is greatly backed by research and goes beyond the mere analysis of financial ratios so that value traps are avoided and fraudulent activities among companies recognized.
The portfolio of ACATIS India Value Equities is concentrated and generally consists of a maximum 25 stocks. Stock picking is based on the philosophy of buying companies, with equities simply the "means" to this end. And best of all is when companies are selected and never sold again. Just like ACATIS, Siddharth Mehta-Thomas and Krishnaraj Venkatraman are value investors who seek out and buy equities at a discount on the intrinsic value or with a sizeable margin of safety.
Fund name: ACATIS India Value Equities
Fund partner: ACATIS Investment GmbH, Frankfurt am Main / Germany
Advisor for ACATIS for the ACATIS India Value Equities: Beaconsfield Investment Management, Bangalore / India
Investment company: Universal-Investment Gesellschaft mbH, Frankfurt am Main / Germany
Fund category: Equity fund
Fund currency: USD
Unit type: Accumulating
Benchmark: 100% MSCI® India Index (INR) NDR (USD)
Ongoing charges (estimate): 2 %
Initial charge: Up to 5 %
Performance fee: 15% of the return generated by the fund in the accounting period above the reference value (MSCI® India Index (INR) NDR (USD)) but only if the share value at the end of the accounting period exceeds the share value at the beginning of the accounting period.
ACATIS Investment GmbH is a bank-independent, autonomous asset manager whose core competence lies in value investing according to Benjamin Graham and Warren Buffett. Since 1994 ACATIS has been managing institutional assets according to the value investing principle and today manages various mutual funds and institutional funds. The spectrum contains equity funds, balanced funds, bond funds and an umbrella fund; 3 funds are also focused on the aspect of sustainability. The first mutual fund, the ACATIS Aktien Global Fonds UI, was launched in 1997.
Further information can be found at www.acatis.com