Fund Objective

The investment objective of the Neptune India Fund is to generate capital growth from investment predominantly in Indian securities, or in the securities issued by companies transacting a significant proportion of their business in India.

View on Past Performance

The quarter proved to be one of the most volatile and eventful in equity market history, as the fallout from the credit crunch gained traction, world GDP forecasts continued to fall, and panic characterised the world's financial markets.The seizing-up of the credit markets and the high profile failures of several large US and European financial institutions, including the bankruptcy of Lehman Brothers, compelled an unprecedented policy response from governments around the world to try to prevent a complete breakdown of the global financial system.Despite the relatively sound condition of both Indian financial institutions and the Indian economy, the equity market was not spared, as extreme uncertainty and negative sentiment globally, coupled with forced liquidation, drove the market down. In addition, continued high inflation and the political overhang of the upcoming election in 2009 added to investor concerns.

Future Expectations

Our long-term view on Indian economic growth remains positive, driven by structural factors such as the extensive infrastructure investment programme, strong consumption growth and favourable demographics.In the short term, however, cyclical and sentiment risks are a concern and accordingly we have positioned the Fund more defensively. We are however starting to see very good value emerge, as companies with strong earnings outlooks and solid balance sheets are de-rated with the broader market.

Fund Details