Investment trust insider on India – James Carthew: India trusts still have questions to answer
A couple of months ago, I highlighted the wide discounts that most of the investment trusts in the India sector were trading on. These have not gone away.
However, in terms of underlying returns and net asset value (NAV), until recently, Indian funds had largely bucked the trend of declining global markets. That situation changed around a month ago and, since then, we have seen NAV falls of 3-5% and share price falls of 3-10%. Nevertheless, this is small beer relative to the falls that other markets have experienced.
Indeed, with the exception of Aberdeen New India (ANII), the funds in the sector stand out for having made positive NAV progress over the past 12 months. Ashoka India Equity (AIE) leads the pack with an NAV return of 7.4%. As far as general equity funds go, only Gulf Investment (GIF), the two Latin American funds and Murray International (MYI) have done better in NAV terms than Ashoka.
Historically, a period of higher energy prices would be bad news for the Indian economy (most oil is imported) and would be associated with rampant inflation and a weak currency. However…
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