Bestinvest says
First State's Emerging Market team has a strong reputation for having a cautious approach to markets. Therefore they believe in doing their own research and undertake detailed company analysis, and as such have strong research capabilities within Emerging Markets. However, given that India is a less mature market, the fund is likely to be volatile from time to time. Nevertheless we have confidence that this fund will add value relative to the peer group over the medium to longer term.
The manager screens stocks in the region against liquidity and quality criteria to yield to list of around 400-500 stocks, which the manager then distils down to an active watch list of 200 companies. These companies are seen at least once a year, and also aid idea generation.
First State carry out detailed fundamental research which includes in-depth balance sheet and cash-flow analysis. Each company is then assigned a target price, and any stock exceeding this price is re-evaluated. The manager believes he adds value by comparing company valuations on a cross-border basis through weekly meetings with the wider emerging markets team, which enables him to place companies into a wider context.