Ashburton Launches Chindia Fund

by Phillip Morton, Investors Offshore.com

30 November 2006

Ashburton, the Jersey-based active investment manager, has announced the imminent launch of an equity fund based on Chinese and Indian stocks.

The Chindia Equity Fund, which is open to both individual and institutional investors, aims to achieve capital-growth by primarily investing in Chinese and Indian companies. It will be managed by Jonathan Schiessl, who has had responsibility for the Asia Pacific region for the last six years, boasting a top quartile track record for that period, according to Ashburton.

Schiessl believes that global economic power is gravitating towards China and India and that the sustained surge in domestic consumption will be a primary factor driving future growth acceleration.

“Reliance on growth from exports is decreasing in both China and India, and consumer demand is growing exponentially as a result of an expanding generation with much higher aspirations. Combined, these two countries will be the second largest economic power in the next 15 years and the opportunities this offers to investors is tremendous," Schiessl noted.

“China is expected to grow at a rate of 8% to 10% per annum for the foreseeable future, while a growth rate of 8% per year is projected for India. This growth will be primarily driven by demographics as the working population of both countries is expected to increase by a staggering 250 million by 2020. The US and Europe combined are only likely to increase by around 6 million over the next 14 years. It’s really just a numbers game," he added.

While the majority of the fund will invest in the stock markets of China and India, it will also leverage off companies traded in other markets, where a significant proportion of growth in their underlying business is set to derive from China or India.

Schiessl explained: “The percentage invested in the two countries may fluctuate over time. However, the Fund’s benchmark will be 50% MSCI China and 50% MSCI India. We will be following a bottom-up stock selection strategy which will enable us to carefully pick the companies and sectors which we believe deliver the best growth at a reasonable price. We will not be constrained by the benchmark."

He concluded: “While we are optimistic about the long-term rewards, there will undoubtedly be challenges along the way. We believe that an unconstrained, actively managed approach is ideally suited to the success of such a fund, and are very pleased that UK investors can now access these vibrant economies and Ashburton’s expertise in this region."

Recommended