Ashoka India Equity Investment Trust PLC - AIE

Stock Discussions
1

I am intrigued by the Indian market and now even more so as India’s GDP has overtaken UK’s GDP (didn’t read about this in this week’s UK papers though; local bias). Those who like their investments spicy might be tempted by this single country investment trust.

https://ashokaindiaequity.com

Share price screenshot from Google Finance
Screenshot 2022-09-08 at 17.32.06

Sounds like the incentives are lined up to ensure performance: There is a performance fee capped at 30 per cent of performance based on rolling three-year periods and it is paid in AIE shares, half of which are locked up for 3 years. No annual fee. Analyst pay related to how well their stock picks do :slight_smile: .

To compare with a ETF have a look at

or

for example.

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2

Interesting trust this one. It’s relatively new but short-term performance wipes the floor with its competitors, IGC, ANII and JII.

I could be tempted to buy, if I can justify holding it alongside existing India exposure via VFEM and PHI.

The research, linked below, neatly sums up the pros and cons:

Bull

  • The best track record amongst India specialist peers since inception
  • Large team of dedicated analysts covering the whole market
  • Fee structure aligns managers’ interests with those of investors

Bear

  • As a single-country trust, highly exposed to the politics and economy of one state
  • A high conviction portfolio, bad stock picks can have a greater impact on the portfolio
  • Performance fee can be high when earned (although overall fees will be low if it is not)

(Note: it’s no longer trading at a discount according to the AIC.)

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Thank you interesting points. I did a quick comparison, using Google Finance, of the trusts you mention (bit hard because as you say AIE has only been around since mid 2018). We can see what you are saying:

Screenshot 2022-09-08 at 18.32.15
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I’ve never been convinced by the other three because they smell too much like ‘index huggers’. They’ve actually underperformed passive ETFs like FRIN and IIND, likely due to the higher fees.

That’s a fair ol’ feat as you could argue that emerging markets is one of only a few areas where active management should have an ‘edge’ due to inefficiencies, lack of information etc.

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Its in my SIPP watchlist

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Interesting spot, thanks. I’m bullish on India and Vietnam long-term…though I have zero knowledge of specific India companies so no idea whether this is better than following the index (which I do) or not.

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