DIY Investor Magazine
|
June 2017
15
country in terms of internet users (ahead of the US,
but behind China), with around 76% of internet users
in India accessing the internet through mobile data .
Given the fast pace of development, India has seen a
“leapfrogging” of technology, with consumers bypassing
fixed broadband and going directly to mobile internet.
Shift from physical to financial savings
Demonetisation has encouraged people to deposit
their cash reserves into the banking system, which
means that people are increasingly moving savings
from physical assets, such as property and gold, to
financial assets. Banks have seen a significant increase
in deposits, domestic mutual funds have seen record
inflows and life insurance sales were up 25% in January
and February, year on year.
Moreover, the government has recently launched
several digital infrastructure initiatives which means
that bank accounts can be linked directly to Aadhaar
biometric IDs, and accessed via mobile phone.
This will enable people to make payments – or indeed
take out insurance, apply for a loan or invest in a mutual
fund – with a fingerprint.
SUMMARY
The existence of even one of these factors would be
positive, so the convergence of all five factors means
that this is the most exciting long term investment
environment I have seen in my 22 years of investing in
India.
On the other hand, in the short term I anticipate there
will be some uncertainty due to demonetisation and
the impending implementation of GST, which may be
reflected through negative surprises in company results
announcements for the next two quarters.
It is naturally possible that markets will fall in reaction
to any negative news; there is also the potential that
domestic inflows of money into the stock market, which
have been very strong in recent months, will support
the market. Either way, I have reason to believe this is a
case of short term pain for long term gain.
I am therefore positive both on the long-term trajectory
of the Indian economy and on the profitability potential
of the businesses held by the Jupiter India Fund.
The fund invests in a single developing geographic area
and there is a greater risk of volatility due to political and
economic change, fees and expenses tend to be higher
than in western markets. These markets are typically
less liquid, with trading and settlement systems that are
generally less reliable than in developed markets, which
may result in large price movements or losses to the
fund.
This fund invests mainly in shares and it is likely to experience fluctuations in price which
are larger than funds that invest only in bonds and/or cash. The Key Investor Information
Document, Supplementary Information Document and Scheme Particulars are available
from Jupiter on request. For definitions please see the glossary at jupiteram.com.
This document is for informational purposes only and is not investment advice. Market and
exchange rate movements can cause the value of an investment to fall as well as rise, and
you may get back less than originally invested.
We recommend you discuss any investment decisions with a financial adviser, particularly
if you are unsure whether an investment is suitable. Jupiter is unable to provide investment
advice.
The views expressed are those of the author at the time of writing, are not necessarily those
of Jupiter as a whole and may be subject to change. This is particularly true during periods
of rapidly changing market circumstances.
Every effort is made to ensure the accuracy of any information provided but no assurances
or warranties are given.
Jupiter Unit Trust Managers Limited (JUTM) and Jupiter Asset Management Limited (JAM),
registered address: The Zig Zag Building, 70 Victoria Street, London, SW1E 6SQ are
authorised and regulated by the Financial Conduct Authority.
No part of this document may be reproduced in any manner without the prior permission of
JUTM or JAM. 19727.
