14th Jun 2024 09:13
(Alliance News) - abrdn New India Investment Trust PLC on Friday said net asset value increased in its latest year, but warned shareholders that investing in India "means accepting market volatility".
The London-based, India-focused investor said NAV at March 31 was 819.56 pence per share, up from 641.32p at the same time one year prior.
Shares in abrdn New India perked up 0.5% to 786.00 pence on Friday morning in London.
abrdn New India also reported a positive 27.8% NAV total return for the 12 months to March 31, while the MSCI India index delivered positive 34.4%.
The previous year, the trust delivered a negative 8.0% total return, while the MSCI India delivered negative 6.0%.
abrdn New India declared no dividends for the year, unchanged from financial 2023. Its investment objective prioritises "long term capital appreciation" for shareholders, "with dividend yield...being of secondary importance".
"Looking at your company's performance during the year in more detail, the largest positive contribution to relative performance came from property," proclaimed Chair Michael Hughes. "The portfolio has a large exposure to this sector...as India is undergoing a long overdue recovery in residential property sales, and the long-term prospects remain bright.
"It is pleasing to note that your manager's decision to proactively pivot the portfolio towards industrial names and likely beneficiaries of large-scale public spending is starting to pay off."
abrdn New India reported that between the year end and June 10, it "has performed extremely well", outperforming the benchmark's positive 6.0% return with its own positive 14.7%.
Looking ahead, Hughes noted that "India's economy is the fastest-growing among its peers" and offers up "a large, relatively young population and a growing middle class"; it also "enjoys more geopolitical stability compared to other emerging market countries".
"Investing in India, however, means accepting market volatility, particularly as high growth rates in corporate earnings come with high valuations," Hughes cautioned. "This is particularly true in small and mid-cap stocks; these do not form the core of our portfolio although they are included in it to ensure that shareholders benefit over the medium-to-longer term.
"Your board is confident that your manager has assembled a portfolio of high-quality, resilient companies that possess strong balance sheets and can profit from pricing power at each stage of the economic cycle."
By Emma Curzon, Alliance News reporter
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