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Indian Subcontinent All Cap

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.

Launched 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

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Quarterly updates

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.

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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.

Download a PDF copy

Select Strategy update and/or Proxy voting to produce a report. You can then download a copy of the report by clicking on the button.

You can build a bespoke report for all our strategies on the full Quarterly update report.

Stewart Investors Quarterly Client Update Q4 2024

1 October - 31 December 2024

Quarter update

Risk factors

This material is a financial promotion for the Stewart Investors strategies – Asia Pacific and Japan All Cap, Asia Pacific Leaders, Asia Pacific All Cap, European All Cap, European (ex UK) All Cap, Global Emerging Markets All Cap, Global Emerging Markets Leaders, Indian Subcontinent All Cap, Worldwide All Cap and Worldwide Leaders – and is intended for professional clients only in the UK, Switzerland and EEA and professional clients elsewhere where lawful.

Within the EU/EEA and Switzerland, the European (ex UK) strategy is only available to investors via a segregated mandate account.

Investing involves certain risks including:

  • The value of investments and any income from them may go down as well as up and are not guaranteed. Investors may get back significantly less than the original amount invested.
  • Emerging market risk: Emerging markets tend to be more sensitive to economic and political conditions than developed markets. Other factors include greater liquidity risk, restrictions on investment or transfer of assets, failed/delayed settlement and difficulties valuing securities.
  • Indian Subcontinent risk: although India has seen rapid economic and structural development, investing there may still involve increased risks of political and governmental intervention, potentially limitations on the allocation of the strategy’s capital, and legal, regulatory, economic and other risks including greater liquidity risk, restrictions on investment or transfer of assets, failed/delayed settlement and difficulties valuing securities.
  • Specific region risk: investing in a specific region  may be riskier than investing in a number of different countries or regions. Investing in a larger number of countries or regions helps spread risk.
  • Currency risk: the strategies invest in assets which are denominated in other currencies; changes in exchange rates will affect the value of the strategies and could create losses. Currency control decisions made by governments could affect the value of the strategies’ investments and could cause the strategies to defer or suspend redemptions of shares.
  • Concentration risk: the European Sustainability and Worldwide Leaders Sustainability strategies referred to in this material invest in a relatively small number of companies which may be riskier than a strategy that invests in a large number of companies.
  • Smaller companies risk: investments in smaller companies may be riskier and more difficult to buy and sell than investments in larger companies.

Where featured, specific securities or companies are intended as an illustration of investment strategy only, and should not be construed as investment advice or a recommendation to buy or sell any security.

If you are in any doubt as to the suitability of our strategies for your investment needs, please seek investment advice.

Investment philosophy

  • We are stewards: Our role is to allocate society’s capital to productive uses, in accordance with our Hippocratic Oath
  • We are long term: Our time horizon is measured in years, not weeks, and we value companies accordingly
  • We invest only in companies contributing to a more sustainable future: We engage constructively as owners to help companies on their sustainability journeys
  • We invest only in high-quality companies: We seek out companies with exceptional cultures, strong franchises and resilient financials
  • We believe capital preservation is important for capital growth: We define risk as the possibility of the permanent loss of client capital

Investment objective

To generate attractive long-term, risk-adjusted returns by investing in the shares of high-quality companies that are particularly well positioned to contribute to, and benefit from sustainable development.

Important information

This material is for general information purposes only. It does not constitute investment or financial advice and does not take into account any specific investment objectives, financial situation or needs. This is not an offer to provide asset management services, is not a recommendation or an offer or solicitation to buy, hold or sell any security or to execute any agreement for portfolio management or investment advisory services and this material has not been prepared in connection with any such offer. Before making any investment decision you should conduct your own due diligence and consider your individual investment needs, objectives and financial situation and read the relevant offering documents for details including the risk factors disclosure. Any person who acts upon, or changes their investment position in reliance on, the information contained in these materials does so entirely at their own risk.

We have taken reasonable care to ensure that this material is accurate, current, and complete and fit for its intended purpose and audience as at the date of publication but the information contained in the material may be subject to change thereafter without notice.

No assurance is given or liability accepted regarding the accuracy, validity or completeness of this material.

To the extent this material contains any expression of opinion or forward-looking statements, such opinions and statements are based on assumptions, matters and sources believed to be true and reliable at the time of publication only. This material reflects the views of the individual writers only. Those views may change, may not prove to be valid and may not reflect the views of everyone at First Sentier Investors.

Past performance is not indicative of future performance. All investment involves risks and the value of investments and the income from them may go down as well as up and you may not get back your original investment. Actual outcomes or results may differ materially from those discussed. Readers must not place undue reliance on forward-looking statements as there is no certainty that conditions current at the time of publication will continue. 

References to specific securities (if any) are included for the purpose of illustration only and should not be construed as a recommendation to buy or sell the same. Any securities referenced may or may not form part of the holdings of First Sentier Investors’ portfolios at a certain point in time, and the holdings may change over time.

References to comparative benchmarks or indices (if any) are for illustrative and comparison purposes only, may not be available for direct investment, are unmanaged, assume reinvestment of income, and have limitations when used for comparison or other purposes because they may have volatility, credit, or other material characteristics (such as number and types of securities) that are different from the funds managed by First Sentier Investors.

Selling restrictions

Not all First Sentier Investors products are available in all jurisdictions.

This material is neither directed at nor intended to be accessed by persons resident in, or citizens of any country, 

or types or categories of individual where to allow such access would be unlawful or where it would require any registration, filing, application for any licence or approval or other steps to be taken by First Sentier Investors in order to  comply with local laws or regulatory requirements in such country.

About First Sentier Investors

References to ‘we’, ‘us’ or ‘our’ are references to First Sentier Investors, a global asset management business which 

is ultimately owned by Mitsubishi UFJ Financial Group (MUFG). Certain of our investment teams operate under the trading names FSSA Investment Managers, Stewart Investors and Realindex Investments, all of which are part of the First Sentier Investors Group.

This material may not be copied or reproduced in whole or in part, and in any form or by any means circulated without the prior written consent of First Sentier Investors.

We communicate and conduct business through different legal entities in different locations. This material is communicated in:

  • United Kingdom by First Sentier Investors (UK) Funds Limited, authorised and regulated by the Financial Conduct Authority (reg. no. 2294743; reg office Finsbury Circus House, 15 Finsbury Circus, London EC2M 7EB).
  • European Economic Area by First Sentier Investors (Ireland) Limited, authorised and regulated in Ireland by the Central Bank of Ireland (CBI reg no. C182306; reg office 70 Sir John Rogerson’s Quay, Dublin 2, Ireland; reg company no. 629188).
  • Other jurisdictions, where this document may lawfully be issued, by First Sentier Investors International IM Limited, authorised and regulated in the UK by the Financial Conduct Authority (reg. no. 122512; reg office 23 St. Andrew Square, Edinburgh, EH2 1BB; regcompany no. SC079063).

To the extent permitted by law, MUFG and its subsidiaries are not liable for any loss or damage as a result of reliance on any statement or information contained in this document. Neither MUFG nor any of its subsidiaries guarantee the performance of any investment products referred to in this document or the repayment of capital. Any investments referred to are not deposits or other liabilities of MUFG or its subsidiaries, and are subject to investment risk, including loss of income and capital invested.

© First Sentier Investors Group

Full Quarterly client update >>

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.

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1 Source: India closes in on China as largest emerging market (ft.com)

2 Source: India overtakes China in world’s biggest investable stock benchmark (ft.com)

3 Source: Five undervalued qualities of the Indian economy

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.

Strategy update: Q1 2024

Indian Subcontinent All Cap strategy update: 1 January - 31 March 2024

During the quarter, we completely exited Tata Technologies (India: Communication Services) and HDFC Life (India: Financials). We applied for shares in the initial public offering (IPO) of Tata Technologies and only received a small allocation given the popularity of the company. On listing, the share price jumped more than 150% making the company expensive overnight. We sold as the strategy was left with a small position in an expensively valued business. We continue to like the quality of stewardship at HDFC Life and the long-term opportunity for life insurance in India. We struggled to build conviction in the complex financial quality and the heightened competitive intensity of the sector. We will continue to monitor the evolution of these businesses. We reduced our holdings in CG Power (India: Industrials) and Tata Consumer Products (India: Consumer Staples) due to expensive valuations. We remain excited for the long-term potential of both companies.

We used the cash from the above sales to fund purchases in some of our reasonably valued holdings such as Cyient (India: Information Technology), Triveni Turbines (India: Industrials), Blue Dart Express (India: Industrials), IndiaMART (India: Industrials) and Tarsons Products (India: Health Care). These companies are leaders in their fields with a significant opportunity set ahead of them.

As ever, we continue to believe that bottom-up analysis, with a focus on fundamental quality and sustainable growth tailwinds, is the best route to tapping into the opportunities and protecting against the risks of investing in the Indian Subcontinent.

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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Proxy voting

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.

Proxy voting: Q1 2024

Indian Subcontinent All Cap proxy voting: 1 January - 31 March 2024

Proxy voting by country of origin

Proxy voting by proposal category

During the quarter there were 32 resolutions from 11 companies to vote on. On behalf of clients, we didn't 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 December 2024. *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

View our list of investment terms to help you understand the terminology within this website.

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