Fidelity unveils India-focused fund

Move follows India's status as the fastest growing economy

Fidelity International has launched an India-focused fund. The open-ended fund was launched under Fidelity's Luxembourg-registered SICAV range and is currently registered in 10 European countries.

Ashu Suyash, head of business, Fidelity India said, "India is one of the fastest growing economies in the world and in our view, offers prospect of good returns over the longer term. The fund is aimed at the more adventurous investors and offers a route to one of the fastest growing economies of emerging Asia."

The fund will follow a bottom-up portfolio, built on Fidelity's own research and plans to hold a portfolio of 50 to 75 stocks, with a long term approach which means it will keep its stock turnover low.

The new fund will also hold stocks of non-Indian companies which derive a significant portion of their income from the country, Ashu said.

The India-focused fund will be managed by Michael Gordon - chief investment officer, Asia Pacific (ex-Japan) and will be supported by Arun Mehra, Head of Investment Strategy. Mehra is based in Mumbai.

The fund is only in its early stages of being marketed and was launched only on August 23, 2004.

Explaining the rationale behind launching an India focused fund even as Fidelity is all set to launch its asset management business in India, Arun Mehra added, "One of the main pointers of sustained growth is demographics. India has seen an explosion of its middle classes over the last few years with an emerging generation of highly educated young workers earning higher incomes than ever before. This has driven massive growth in domestic consumption and if you combine this with the boom in the pharmaceutical industry and government spending on infrastructure, India reveals itself as the one of the most attractive growth stories in the investment world right now".

Fidelity currently holds $1.4 billion in Indian securities and has been investing in India since the last eight years.

Together with FMR Corp of Boston, US, Fidelity is the world's largest fund manager with US$ 1.2 trillion assets under management as on June 2004.