Mississauga, Ont.-based Excel Funds Management Inc. is set to launch two new India-focused mutual funds that are looking to capitalize on the growth and income opportunities that are possible within the world’s fastest-growing economy.
“India’s attractiveness as one of the top investment destinations in the world stems from the acceleration in its economic growth, buoyed by comprehensive political and regulatory reforms,” says Bhim Asdhir, president and CEO of Excel, in a statement released on Monday. “[There are] record levels of foreign investment, declining inflation, a strong currency, and increasing consumer demand resulting from rapid urbanization.”
The company has filed a preliminary prospectus for Excel India Balanced Fund and Excel New India Leaders Fund.
Excel India Balanced Fund is an actively managed and diversified portfolio looking to provide income and long-term capital appreciation. It will pay an annual distribution that is estimated to be in the range of 4% initially, according to the firm’s announcement.
“In addition to high-quality Indian equities, [Excel India Balanced Fund] offers access to the Indian fixed-income market, which was not readily accessible to Canadian investors previously,” says Christine Tan, chief investment officer with Excel Investment Counsel Inc., in the statement. “The Indian fixed-income market offers attractive yields, underpinned by a liquid market and highly rated issuers.”
Excel New India Leaders Fund is looking for long-term growth of capital and invests primarily in the equities of small- and mid-capitalization companies in India that are considered to be emerging industry leaders. The fund targets under-researched and under-valued stocks to generate returns.
“Mid- and small-cap companies tend to grow at a faster pace than larger companies during periods of strong economic growth, providing the potential for higher returns,” Tan says. “They tend to be more nimble and entrepreneurial and are not constrained by hierarchical decision-making structures.”
A team at Mumbai-based Birla Sun Life AMC Ltd. will manage the funds actively, which is an advantage, says Asdhir: “By being on the ground in India, Birla’s large team of portfolio managers has first-hand knowledge of the companies in which they invest, backed by a strong emphasis on in-house systematic research.”
The introduction of these two funds increases the firm’s number of India-focused funds, which includes the Excel India Fund, whose Series A won the Lipper Fund Award for best geographic equity fund over a three-year period.