Fidelity India is an Managed Funds investment product that is benchmarked against Developed -World Index and sits inside the Foreign Equity - Other Index. Think of a benchmark as a standard where investment performance can be measured. Typically, market indices like the ASX200 and market-segment stock indexes are used for this purpose. The Fidelity India has Assets Under Management of 203.09 M with a management fee of 1.2%, a performance fee of 0.00% and a buy/sell spread fee of 0.8%.
The recent investment performance of the investment product shows that the Fidelity India has returned -2.11% in the last month. The previous three years have returned 12.51% annualised and 21.56% each year since inception, which is when the Fidelity India first started.
There are many ways that the risk of an investment product can be measured, and each measurement provides a different insight into the risk present. They can be used on their own or together to perform a risk assessment before investing, but when comparing investments, it is common to compare like for like risk measurements to determine which investment holds the most risk. Since Fidelity India first started, the Sharpe ratio is NA with an annualised volatility of 21.56%. The maximum drawdown of the investment product in the last 12 months is -2.11% and -62.39% since inception. The maximum drawdown is defined as the high-to-low decline of an investment during a particular time period.
Relative performance is what an asset achieves over a period of time compared to similar investments or its peers. Relative return is a measure of the asset's performance compared to the return to the other investment. The Fidelity India has a 12-month excess return when compared to the Foreign Equity - Other Index of -3.68% and 1.35% since inception.
Alpha is an investing term used to measure an investment's outperformance relative to a market benchmark or peer investment. Alpha describes the excess return generated when compared to peer investment. Fidelity India has produced Alpha over the Foreign Equity - Other Index of NA% in the last 12 months and NA% since inception.
For a full list of investment products in the Foreign Equity - Other Index category, you can click here for the Peer Investment Report.
Fidelity India has a correlation coefficient of 0.75 and a beta of 0.28 when compared to the Foreign Equity - Other Index. Correlation measures how similarly two investments move in relation to one another. This establishes a 'correlation coefficient', which has a value between -1.0 and +1.0. A 100% correlation between two investments means that the correlation coefficient is +1. Beta in investments measures how much the price moves relative to the broader market over a period of time. If the investment moves more than the broader market, it has a beta above 1.0. If it moves less than the broader market, then the beta is less than 1.0. Investments with a high beta tend to carry more risk but have the potential to deliver higher returns.
For a full quantitative report on Fidelity India and its peer investments, you can click here for the Peer Investment Report.
For a full quantitative report on Fidelity India compared to the Developed -World Index, you can click here.
To sort and compare the Fidelity India financial metrics, please refer to the table above.
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The Fund returned -2.1% over the quarter, while the index returned -5.2%. Shares in several Adani Group companies experienced massive losses following the release of a research report that highlighted concerns over the group’s debt levels. Therefore, not holding Adani Total Gas, Adani Enterprises, Adani Transmissions and Adani Green Energy contributed to relative performance. The holding in HCL Technologies added value. The company posted higher-than-expected profits for the December quarter, aided by their strong order pipeline. Its shares are also supported by its long-term sustainable growth, better sales growth and higher risk-reward The conviction position in HDFC Bank enhanced gains as it reported a jump in net profits, buoyed by higher top-line and strong loan growth. The lack of exposure to ITC weighed on returns. It posted healthy profit estimates for the December quarter, helped by steady demand for its packaged food. The lack of exposure to Tata Consultancy Services pared gains. The company exhibits quality characteristics including better growth rates, margins and execution skills, which puts it ahead of its peers. Not holding Larsen & Toubro held back gains. Its biggest segment, infrastructure projects, reported a strong pick up in order inflow. The stock was sold from a sustainability point of view due to concerns around its defence business.
Holdings in IT services detracted from performance
An anticipated slowdown in IT spending, given rising inflation and a likely slowdown in global growth, put pressure on IT stocks. As a result, positions in Infosys and HCL Technologies held back gains, while the conservative exposure to TCS and the overall underweight in the sector added relative value. Infosys is expected to strengthen its sales team, with a special focus on large deals and investing in digital capabilities, which has resulted in market share gains and industry-leading growth over the last three years. HCL Technologies has created strong capabilities in cloud infrastructure services and benefits from the acceleration in the shift to cloud and cyber security requirements in remote workplaces.
Positions in NBFCs and insurance companies held back gains
The holding in Shriram Transport Finance, the largest used commercial vehicle financier in India slid. Investors took profits in the stock ahead of its merger with Shriram City Union Finance and Shriram Capital. The consolidation is set to create the largest retail non-bank financial company (NBFC) in the country. In the insurance space, positions in ICICI Lombard General Insurance weighed on performance.
Holdings in IT services detracted from performance
An anticipated slowdown in IT spending, given rising inflation and a likely slowdown in global growth, put pressure on IT stocks. As a result, positions in Infosys and HCL Technologies held back gains, while the conservative exposure to TCS and the overall underweight in the sector added relative value. Infosys is expected to strengthen its sales team, with a special focus on large deals and investing in digital capabilities, which has resulted in market share gains and industry-leading growth over the last three years. HCL Technologies has created strong capabilities in cloud infrastructure services and benefits from the acceleration in the shift to cloud and cyber security requirements in remote workplaces.
Positions in NBFCs and insurance companies held back gains
The holding in Shriram Transport Finance, the largest used commercial vehicle financier in India slid. Investors took profits in the stock ahead of its merger with Shriram City Union Finance and Shriram Capital. The consolidation is set to create the largest retail non-bank financial company (NBFC) in the country. In the insurance space, positions in ICICI Lombard General Insurance weighed on performance.
Stock picking in consumer discretionary added value
The allocation to premium two-wheeler manufacturer Eicher Motors proved rewarding with better-than-expected results due to its product mix and price hikes. The company also fared well on the export front, with an encouraging response from Brazil and Australia. Eicher Motors is trying to make the brand more accessible, with new product launches at competitive prices to attract young customers. The position in Sapphire Foods, one of the largest franchisees of Yum! Brands, which operates KFC/Pizza Hut stores in India, gained amid optimism around robust growth in its stores and a guidance upgrade.
The Fund returned -5.8% over the quarter, while the index returned -5.7%.
Selected financials added value
The holding in Shriram Transport Finance, the largest used commercial vehicle financier in India, advanced. In our view investor sentiment was buoyed by the RBI’s approval of the merger of Shriram City Union Finance and Shriram Capital Ltd with Shriram Transport Finance Company. The consolidation is set to create the largest retail non-bank financial company (NBFC) in the country. Holdings in private lenders HDFC Bank and ICICI Bank proved rewarding. We believe that shares in these banks gained momentum amid expectations of improved margins supported by interest rate hikes. The merger of Housing Development Finance Corporation (HDFC) with HDFC Bank may have further buoyed investor sentiment.
Underweight in IT services companies enhanced gains
Potential concerns over a slowdown in demand against the backdrop of muted economic growth weighed on IT services companies. The lack of exposure to Tech Mahindra and Wipro proved rewarding as these companies slid in line with global peers. Conversely, a slight overweight in Infosys held back gains.
Bias against utilities and selected automobile names detracted
Not holding selected utility companies, including NTPC, Adani Total Gas, Adani Enterprises and Adani Transmission held back gains. These companies fared well in a risk-off environment. The lack of exposure to tractor manufacturer Mahindra & Mahindra and automobile manufacturer Maruti Suzuki detracted from relative performance. Shares in these companies gained momentum towards the end of the period as commodity prices eased somewhat. Encouragingly, the exposure to premium two-wheeler manufacturer Eicher Motors proved rewarding amid steady demand in both domestic and international markets. The company has an encouraging response from Brazil and Australia on the export front. Moreover, its new launches, distribution network expansion in underpenetrated Indian states and international expansion are helping to offset the slowdown in more mature states.
Stock selection in utilities and financials proved rewarding In the utilities space, Gujarat Gas was supported by continued strength in its core area in Gujarat and continued expansion into new regions. It remains a key beneficiary of the government’s impetus to adopt greener fuel in India. Among financials, Shriram Transport Finance Company benefited from the post COVID-19 normalisation, driven by favourable government policies and easy liquidity. The position in Axis Bank, India’s third largest private sector lender, rebounded on increased confidence about the bank’s resilience during the pandemic. Construction proxy stocks added value India’s largest structural steel tubes and pipes player APL Apollo Tubes gained momentum amid an encouraging demand outlook, driven by the launch of new products with strong distribution and branding efforts. Ultratech Cement also advanced during the month. Increased government spending on infrastructure projects, low interest rates supporting housing demand and ongoing government programmes for low-cost housing is driving cement demand. Chlorinated polyvinyl chloride (CPVC) pipe player Astral PolyTechnik gained momentum after it reported better than expected earnings due to higher plastic pipe margins, and strong revenues and margins for its adhesive business.
Invests in a diversified selection of 30 to 50 Indian companies and draws on the research capabilities of Fidelity’s analysts based on the ground in India. Valuation plays a key role in stock selection. Portfolio holdings are continually assessed against new investment ideas.
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