28.03.2018

Cornhill’s award-winning WIOF India Performance Fund has outperformed peers at the start of this year as it continues to deliver after a stellar run of returns in 2017.

The outperformance of the equity fund, which posted a 64% gain last year (Class A USD), comes despite the downturn on global markets seen in the first months of 2018.

According to research from fund news and research portal Trustnet.com, the WIOF India Performance Fund beat the performance of similar Indian equity funds from global fund houses such as Schroders, Sanlam and others.

The success of the fund, which was named Equity Fund of the Year 2014 in a survey by global finance and business magazine Forbes, comes as the Indian economy is booming and the country’s pro-business government pushes ahead with reforms which are fundamentally changing the investment environment.

According to latest forecasts from the International Monetary Fund, India will become the fastest growing major economy in the world in 2018, with growth set to hit 7.4%, well above most other emerging markets and major developed economies.

Meanwhile, its equity market will become the fifth largest in the world, eclipsing China, according to Mumbai-based financial group Sanctum Wealth Management, as reforms change the way Indians invest.

New legislation on banking and ongoing financialization of household savings has helped drive a shift in capital flows into Indian equities from foreign investors to domestic investors – domestic mutual funds bought USD15.3bn of equities last year as opposed to USD8bn bought by foreign investors - meaning the health of equity markets is far less reliant on foreign capital.

Domestic investors are rebalancing their portfolios away from gold and property and into financial assets such as equities.

A raft of key economic reforms have also changed the market picture – the landmark Goods and Sales Tax (GST), introduced in 2017, has brought a 50% increase in the number of unique taxpayers; banks are cleaning up their balance sheets, which should help corporate lenders; government housing schemes will help developers, contractors and the wider construction industry.

As well as this, corporate earnings growth is expected to be strong going forward with the local NIFTY Index’s FY2019 and FY2020 EPS forecasted to grow at 22% and 18% respectively.

Last year, the Indian equity market was one of just three emerging markets which gained more than 35%, and its market capitalisation grew a staggering 46%. And experts are excited about the future prospects for Indian equities.

Reliance Wealth Management, Investment Advisor for the WIOF India Performance Fund, said: “We remain enthused by the fact that India is witnessing multiple reforms being implemented simultaneously. This, we believe, augurs very well for the equity investor with a longer term horizon.”