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Indian Subcontinent All Cap
Launched in 2006, the strategy invests in companies based in or having significant operations in India, Pakistan, Sri Lanka or Bangladesh.
Strategy overviewLaunched in 2006, the Stewart Investors Indian All Cap Strategy is a long-term, equity-only strategy that aims to invest in shares of high-quality companies positioned to contribute to, and benefit from, the sustainable development of the region. Given the size of the economy and the investment universe, the majority of the strategy’s 30-60 investments are in Indian-listed companies.
Strategy highlights: a focus on quality and sustainability
- Companies must contribute to sustainable development. Portfolio Explorer >
- We invest in high-quality companies with exceptional cultures, strong franchises and resilient financials. How we pick companies >
- We avoid companies linked to harmful activities and engage and vote for positive change. Our position on harmful products >
- Our approach is long-term, bottom-up, high conviction and benchmark agnostic
- We focus on capital preservation as well as capital growth – we define risk as the permanent loss of client capital
Latest insights
Quarterly updates
Strategy update: Q1 2025
Indian Subcontinent All Cap strategy update: 1 January - 31 March 2025
Due to the recent softness in the Indian market, we have received lots of questions from investors and plenty of interest in the strategy. Recent market declines have given us an opportunity to add to some of our existing high-quality holdings at more attractive valuations as well as to add a number of new names.
Over the quarter, we initiated a new position in Bajaj Auto (India: Consumer Discretionary), a leading manufacturer of automobiles. This is another company in the Bajaj stable that we believe represents a strong franchise with a high-quality steward behind it. It joins our existing position in Bajaj Holdings & Investment (India: Financials), which is the holding company of siblings Rajiv and Sanjiv Bajaj, who have an exemplary track record of delivering shareholder returns.
Elsewhere, we continued to build a position in Sundaram Finance (India: Financials), a high-quality and conservative financial services institution stewarded by the Sundaram Group. Meanwhile, to benefit from lower valuations, we added to our existing holdings in Tube Investments (India: Consumer Discretionary), Blue Dart Express (India: Industrials), SKF India (India: Industrials), Elgi Equipments (India: Industrials) and Cholamandalam Financial Holdings (India: Financials).
To fund these additions, we sold our positions in Havells (India: Industrials), Carborundum Universal (India: Materials) and Bosch India (India: Consumer Discretionary). Although we continue to believe in these businesses’ long-term growth potential, we believe there are better returns to be achieved elsewhere given their relative valuations.
The strategy’s performance over the past quarter (and over the past year) has been disappointing. We would have hoped that it would have exhibited greater resilience relative to the market. At the same time, however, we would caution that a single quarter is too short a timeframe over which to measure equity returns. When considering the future of the underlying businesses that we invest in, we look several years – and sometimes decades – into the future. On reflection, we could perhaps have trimmed position sizes more aggressively in our strongest performing industrial names. At the same time, however, we still see good value when considering their long-term potential.
The softness in the Indian market in recent months must be seen in the context of the strong returns that it has generated in recent years. Furthermore, equities are long-duration assets, so we continue to focus on the long-term growth potential of the companies we own. We have made three visits to India over the past four months and, in common with the corporate stewards backing our companies, we remain excited by the opportunity to generate compelling investment returns.
Source for company information: Stewart Investors investment team and company data. This stock information does not constitute any offer or inducement to enter into any investment activity. Portfolio data shown is from representative strategy accounts of the strategy shown above. Named new investments disclosed relate to holdings with a portfolio weight over 0.5%. It is not a recommendation or solicitation to purchase or invest in any fund. Differences between the representative account-specific constraints, currency or fees and those of a similarly managed fund or mandate would affect results.
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Strategy update: Q4 2024
Indian Subcontinent All Cap strategy update: 1 October - 31 December 2024
One question we increasingly encounter when speaking to clients is: “isn’t India expensive now”? We can understand why clients are asking this, after all the MSCI India index has risen over 85% in the five years to end December 2024 and has increased by over 12% over the past 12 months alone.1
Two answers spring to mind here: firstly, that we are not investing in the index, we are trying to find the highest-quality companies we can and secondly, we keep a keen eye on valuations and position sizes to try and ensure our investments deliver good, long-term returns whilst also protecting capital. To that end we still see lots of reasons to be positive about the outlook for our India holdings.
We have found a few new ideas at acceptable valuations and during the period we purchased Narayana Health (India: Health Care) which is supplying affordable, private healthcare in India. We also increased our holding in insurer ICICI Lombard (India: Financials).
We sold Mahindra Finance (India: Financials) as we struggled to build conviction in the business trajectory.
As far as monitoring valuations, we slightly trimmed our holdings in Mahindra & Mahindra (India: Consumer Discretionary) and Dr. Lal PathLabs (India: Health Care). Our belief in their long-term success remains robust.
More generally, we continue to assess all our investments from a bottom-up perspective, trying to gauge the quality of the people and businesses that we are backing with your money. We are doing our best not to overpay for these investments and to hold them for the long term. We continue to believe that this is the bedrock of long-term capital preservation and growth.
[1] Source: FactSet. USD total returns.
Source for company information: Stewart Investors investment team and company data. This stock information does not constitute any offer or inducement to enter into any investment activity. Portfolio data shown is from representative strategy accounts of the strategy shown above. Named new investments disclosed relate to holdings with a portfolio weight over 0.5%. It is not a recommendation or solicitation to purchase or invest in any fund. Differences between the representative account-specific constraints, currency or fees and those of a similarly managed fund or mandate would affect results.
Strategy update: Q3 2024
Indian Subcontinent All Cap strategy update: 1 July - 30 September 2024
“Red-hot Indian market”,1 “India overtakes China in world’s biggest investable stock benchmark”,2 “Five undervalued qualities of the Indian economy”3 and so on and so on; one is hard pushed to find negative news on India’s economy or financial markets in mainstream financial media these days.
For us, India remains the same exciting investment destination that it has long been and for the same reasons too: a multitude of fantastic companies providing necessary goods and services to a rapidly developing population which leaves long-term and quality-focused investors spoilt for choice.
In terms of new positions, we bought ICICI Lombard (India: Financials), one of India’s largest private sector general insurance companies. ICICI Lombard is addressing the underinsurance gap in India by expanding access to insurance products to help individuals, businesses and families better manage risks. The company is well-managed and our conviction has grown enough to purchase for the strategy.
In the quarter, we increased our positions in Cholamandalam Financial Holdings (India: Financials), Aavas Financiers (India: Financials), Blue Dart Express (India: Industrials), Tata Communications (India: Communication Services) and SKF India (India: Industrials) as we believe they are all reasonably valued for good, long-term returns. We partially funded these by reducing our positions in CG Power (India: Industrials), as valuations continued to creep up, and HDFC Bank (India: Financials). We sold RBL Bank (India: Financials) and Kotak Mahindra Bank (India: Financials) as we felt there are currently better opportunities, at the margin, elsewhere.
Positive news flow notwithstanding, we continue to assess all our investments from a bottom-up perspective; trying to gauge the quality of the people and businesses that we are backing with your money, and doing our best not to overpay for these investments and to hold them for the long term. We continue to believe that this is the bedrock of long-term capital preservation and growth.
Source for company information: Stewart Investors investment team and company data. This stock information does not constitute any offer or inducement to enter into any investment activity. Portfolio data shown is from representative strategy accounts of the strategy shown above. Named new investments disclosed relate to holdings with a portfolio weight over 0.5%. It is not a recommendation or solicitation to purchase or invest in any fund. Differences between the representative account-specific constraints, currency or fees and those of a similarly managed fund or mandate would affect results.
Strategy update: Q2 2024
Indian Subcontinent All Cap strategy update: 1 April - 30 June 2024
India recently elected her incumbent government back to power albeit in a coalition with a few regional parties. We believe Indian election results are important but their importance is overstated in the context of long-term investment returns since 1991. India’s development changed significantly after an economic crisis in 1991, commonly known as the balance of payments crisis. Consequently, India’s growth and development has been fairly steady and predictable. This has been driven by continuity in policy and reform and a vibrant private sector that is contributing to, and benefitting from, India’s development. We believe this trajectory should continue for many decades to come.
We received a broker email the day before election results listing companies that should be beneficiaries of a strong result for the incumbent government. We were particularly pleased to note that out of the 50 companies named, we held only one in our portfolios. Our investment approach is to invest in companies with enduring long-term qualities. Their only competitive advantage is to deliver value to their customers every day. And they maintain this advantage by focussing on a combination of quality, innovation and trust. These attributes can only be built patiently over decades. Any dependence on politics or favourable regulations is a risk and at best a short-lived advantage – not the enduring quality we seek in our businesses.
Rapid urbanisation and water stress represent key risks for many of our companies. We commissioned a research tender to better understand water stress across our portfolio companies. We also exchanged thoughts with management at portfolio companies on the risks of rapid urbanisation. We will continue to evolve our understanding of these topics and the context in which our companies operate.
We made two new investments in the last quarter, VST Tillers Tractors (India: Industrials) and SKF India (India: Industrials). VST is a family-owned company and India’s leading maker of small farm equipment. Under the stewardship of the next generation of the family and a professional CEO, the company is aiming to capture a bigger proportion of India’s growing farm equipment market. VST is also aiming to grow its exports making better use of its manufacturing capacity while investing significantly behind new products, particularly electric (EV) tractors. We find this journey quite appealing and the valuations remain reasonable for the growth opportunities the company is tapping into.
SKF India, majority-owned by SKF Sweden, is India’s largest maker of ball bearings. Bearings are a small cost for customers but extremely important for the smooth functioning of manufacturing plants and automotive products and railway moving stock. Quality is important and SKF has built a reputation of trust and quality over many decades. This is a particularly attractive trait for returns. SKF India stands to benefit from the rising capital intensity across many of its customer segments.
We funded these investments by selling Tata Consultancy Services (TCS) (India: Information Technology) and reducing our holdings in Mahindra & Mahindra (India: Consumer Discretionary) and CG Power (India: Industrials). TCS is a high-quality business. We sold TCS as we identified attractive opportunities in companies at an earlier stage of their evolution. We first invested in TCS in February 2007 and sold out completely in May 2024. During this period, TCS has delivered annualised compounded returns of c.16.5% and total returns of 1,285% in GBP. These returns were driven by revenues and profits which compounded at a rate of 15% and 14% respectively1. TCS is a prolific generator of free cash flows and has returned excess cash through dividends and buybacks. In the intervening period, TCS had to deal with many macro shocks and external events. Quality companies like TCS are better positioned to manage external shocks and remaining invested is often the best way to enjoy sound long-term returns.
This quarter, we also exited DBH Finance (Bangladesh: Financials) from the portfolio. Although quality remains intact on a bottom-up basis, the company faced increased regulatory pressures across the sector and deteriorating macro-economic conditions.
We reduced our holdings in CG Power as long-term valuations begin to look expensive. Mahindra & Mahindra remains reasonably valued but we trimmed given rising position size. We also added to many companies such as GMM Pfaudler (India: Industrials) and Blue Dart Express (India: Industrials) as valuations became attractive.
1 Source: FactSet
Source for company information: Stewart Investors investment team and company data. This stock information does not constitute any offer or inducement to enter into any investment activity. Portfolio data shown is from representative strategy accounts of the strategy shown above. Named new investments disclosed relate to holdings with a portfolio weight over 0.5%. It is not a recommendation or solicitation to purchase or invest in any fund. Differences between the representative account-specific constraints, currency or fees and those of a similarly managed fund or mandate would affect results.
Proxy voting
Proxy voting: Q1 2025
Indian Subcontinent All Cap proxy voting: 1 January - 31 March 2025
Proxy voting by country of origin
Proxy voting by proposal category
During the quarter there were 23 resolutions from 11 companies to vote on. On behalf of clients, we voted against one resolution.
We voted against the election of a director and their remuneration at IndiaMART as we seek to encourage greater diversity and independence on the board. (one resolution)
Source for company information: Stewart Investors investment team and company data. This stock information does not constitute any offer or inducement to enter into any investment activity. Portfolio data shown is from representative strategy accounts of the strategy shown above. Proxy voting chart numbers may not add to 100 due to rounding. SHP means: Shareholder Proposal.
Proxy voting: Q4 2024
Indian Subcontinent All Cap proxy voting: 1 October - 31 December 2024
Proxy voting by country of origin
Proxy voting by proposal category
During the quarter there were 19 resolutions from seven companies to vote on. On behalf of clients, we did not vote against any resolutions.
Source for company information: Stewart Investors investment team and company data. This stock information does not constitute any offer or inducement to enter into any investment activity. Portfolio data shown is from representative strategy accounts of the strategy shown above. Proxy voting chart numbers may not add to 100 due to rounding. SHP means: Shareholder Proposal.
Proxy voting: Q3 2024
Indian Subcontinent All Cap proxy voting: 1 July - 30 September 2024
Proxy voting by country of origin
Proxy voting by proposal category
During the quarter there were 213 resolutions from 29 companies to vote on. On behalf of clients, we did not vote against any resolutions.
Source for company information: Stewart Investors investment team and company data. This stock information does not constitute any offer or inducement to enter into any investment activity. Portfolio data shown is from representative strategy accounts of the strategy shown above. Proxy voting chart numbers may not add to 100 due to rounding. SHP means: Shareholder Proposal.
Proxy voting: Q2 2024
Indian Subcontinent All Cap proxy voting: 1 April - 30 June 2024
Proxy voting by country of origin
Proxy voting by proposal category
During the quarter there were 68 resolutions from 14 companies to vote on. On behalf of clients, we did not vote against any resolutions.
Source for company information: Stewart Investors investment team and company data. This stock information does not constitute any offer or inducement to enter into any investment activity. Portfolio data shown is from representative strategy accounts of the strategy shown above. Proxy voting chart numbers may not add to 100 due to rounding. SHP means: Shareholder Proposal.
Portfolio Explorer
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For illustrative purposes only. Reference to the names of example company names mentioned in this communication is merely for explaining the investment strategy and should not be construed as investment advice or investment recommendation of those companies. Companies mentioned herein may or may not form part of the holdings of Stewart Investors. Holdings are subject to change.
Certain statements, estimates, and projections in this document may be forward-looking statements. These forward-looking statements are based upon Stewart Investors’ current assumptions and beliefs, in light of currently available information, but involve known and unknown risks and uncertainties. Actual actions or results may differ materially from those discussed. Readers are cautioned not to place undue reliance on these forward-looking statements. There is no certainty that current conditions will last, and Stewart Investors undertakes no obligation to correct, revise or update information herein, whether as a result of new information, future events or otherwise.
Source: Stewart Investors investment team and company data. Securities mentioned are all investee companies* from representative Asia Pacific All Cap Strategy, Asia Pacific & Japan All Cap Strategy, Asia Pacific Leaders Strategy, European All Cap Strategy, European (ex UK) All Cap Strategy, Global Emerging Markets (ex China) Leaders Strategy, Global Emerging Markets Leaders Strategy, Global Emerging Markets All Cap Strategy, Indian Subcontinent All Cap Strategy, Worldwide All Cap Strategy and Worldwide Leaders Strategy accounts as at 31 March 2025. *Assets that the strategies may hold which an active decision has not been made, and sustainability assessment does not apply, include cash, cash equivalents, short-term holdings for the purpose of efficient portfolio management and holdings received as a result of mandatory corporate actions. Holdings of such assets will not appear on Portfolio Explorer.
The Stewart Investors supports the Sustainable Development Goals (SDGs). The full list of SDGs can be found on the United Nations website.
Source for Climate Solutions and impact figures: © 2014–2025 Project Drawdown (drawdown.org). Source for Human Development Pillars: Stewart Investors investment team.
Source for climate solutions and human development analysis and mapping: Stewart Investors investment team. Contributions are defined by the team as demonstrable contributions to any solution, either direct (directly attributable to products, services or practices provided by that company), or enabling (supported or made possible by products or technologies provided by that company).
Investment terms
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Fund data and information
Fund prices and details
Click on the links below to access key facts, literature, performance and portfolio information for the funds and share classes available in this jurisdiction:
Stewart Investors Indian Subcontinent All Cap Fund
Share prices are calculated on a forward pricing basis which means that the price at which you buy or sell will be calculated at the next valuation point after the transaction is placed. Where a fund price is marked XD, this means that the fund is currently Ex-Dividend. Past performance is not necessarily a guide to future performance. The value of shares and income from them may go down as well as up and is not guaranteed. Please note that the yield quoted above is not the historic yield. It is considered that the yield quoted represents the current position of investments, income and expenses in the fund and that this is a more accurate figure. Investors may be subject to tax on their distribution. The yield is not guaranteed or representative of future yields. You should be aware that any currency movements could affect the value of your investment. The Funds within the First Sentier Investors Global Umbrella Fund plc (Irish VCC) are denominated in USD or EUR.
Following the UK departure from the European Union, the First Sentier Investors ICVC, an open ended investment company registered in England and Wales ("OEIC") has ceased to qualify as a UCITS scheme and is instead an Alternative Investment Fund ("AIF") for European Union purposes under the terms of the Alternative Investment Fund Managers Directive (2011/61/EU). Accordingly, no marketing activities relating to the OEIC are being carried out by Stewart Investors in the European Union (or the additional EEA states) and the OEIC is not available for distribution in those jurisdictions. We have made documents available for existing EU investors in the ICVC which can be accessed here.
Strategy and fund name changes
As of end of 2024, please note that Stewart Investors strategies and the Funds within the UK First Sentier Investors ICVC, First Sentier Investors Global Umbrella Fund plc (Irish VCC) and First Sentier Investors Global Growth Funds (Singapore Unit Trust) have been renamed. Please refer to our note via the link below for further information.
