Asia and China are the two new investment themes that are available for Indian mutual fund investors. Ever since the regulator hiked the individual and fund house exposure to international equities, there has been a variety of global fund launches.
While ICICI Prudential Mutual Fund has launched Indo Asian Equity fund, ABN AMRO Mutual Fund has announced launch of China-India Fund.
Seven out of the ten fastest-growing economies in the world are in Asia, points out Nimesh Shah, managing director, ICICI Prudential AMC. Investing in Asia also opens up certain sectors that are not available in the domestic markets, besides MNCs in Asia. Investors get a chance to tap semiconductor stocks from Taiwan, ship-building stocks from South Korea, tourism stocks from Thailand, natural resources companies from Indonesia, some of the sectors that are not available in the domestic market.
ABN AMRO’s China India Fund intends to invest in Chinese stocks listed on Hong Kong Stock Exchange. Mandy Chan, senior portfolio manager, ABN AMRO, sees opportunities in consumer stocks, infrastructure, commodity companies and real estate companies from China.
“The market is currently trading at 18 times price to earnings ratio, but that is not expensive as it has been supported by strong earnings growth of companies,” says Chan.
Both the funds are open-end funds and have limited the asset allocation to 65 per cent in Indian equities and 35 per cent in Asia and China to keep the tax benefits available for Indian equity fund investors intact.