The £453 million Aberdeen New India Investment Trust said its net asset value increased 5.9%, in total return terms, in the “turbulent” six months to September 30, 2022.
By comparison the MSCI India Index, the fund’s benchmark, generated 8.9%, in sterling total returns terms.
The company’s stock price total return was 2.8% over the period as the company’s share price discount to NAV widened as investors took a risk-off attitude.
“While the portfolio delivered a positive absolute return, it lagged the benchmark as positive allocation did not fully offset negative stock selection,” said the investment trust.
On the performance, senior investment directors of Aberdeen New India Investment Trust PLC, Kristy Fong and James Thom said: “The portfolio’s core, well-capitalised holdings in ICICI Bank and Kotak Mahindra Bank outperformed in a rising interest rate environment and amid expectations of an improving credit cycle.
“Both lenders delivered good results that were underpinned by healthy loan and fee-income growth.
“Among insurance names, SBI Life Insurance also outperformed after posting strong quarterly results that demonstrated insurance premium growth and margin uplift, driven by improvements in the company’s product mix and through good execution from management.
“On a positive note, Aberdeen New India Investment Trust’s underweight position to the energy sector was also the biggest contributor to relative returns.
“Global energy prices came under pressure as even a relatively strong US dollar could not compensate for investors’ mounting fears over a global recession and its impact on energy demand.
“The company’s exposure to oil and gas logistics company, Aegis Logistics staged a strong share price rebound during the period on robust gas distribution sales.
“Meanwhile, the portfolio’s more defensive holdings, particularly in the consumption sectors, fared well despite increasing volatility in the market.
“The share price of Hindustan Unilever, the largest, fast-moving consumer goods company in India, recovered from its March lows with resilient margins, thanks to a strong balance sheet, wide distribution channels and its ability to pass on costs.
“A benign monsoon and the festival season further supported solid demand growth.
“Likewise, Crompton Greaves Consumer Electricals also saw its share price rise on resilient demand, which added to the Company’s relative gains.”