Over the year to the end of March 2015 New India Investment Trust delivered a 46.3% return on net assets, well ahead of the 35.6% return on the MSCI India Index. he return to shareholders was even better at 56.4%.
The managers report says Kansai Nerolac Paints did particularly well on the back of robust earnings and the optimistic outlook for auto-sector demand. Other stocks that made positive contributions included Bosch, Gujarat Gas (in the wake of its merger with parent Gujarat State Petroleum Corporation), Container Corp of India (Concor), ABB India and Nestlé India.
Having an underweight to energy stocks was also helpful, in particular, not owning Reliance Industries.
Conversely, being underweight in healthcare weighed on relative performance. It was the best performing sector over the year as the improving US economy and weaker Rupee lifted sentiment for exporters. Also an underweight to and stock selection in the IT sector proved costly; it staged a comeback on a recovery in offshore earnings. Holding Mphasis weighed on the portfolio as its results were poor, due partly to losses at Digital Risk, its recent acquisition. In the Financials sector they report mixed performance – Jammu & Kashmir Bank was a notable detractor on concerns over deteriorating asset quality but HDFC Bank, Gruh Finance, ICICI Bank and ING Vysya Bank gained alongside the broader sector on expectations of accelerating economic growth and easing interest rates.
NII : New India takes full advantage of Indian resurgence