2021 Q3 Top 10 Performing Funds

Highlights: All top 10 performing funds of the quarter were India equity funds. India equity funds on average returned 9.72% during the third quarter of 2021.

For funds available for sale in Singapore
Source: Morningstar

What’s going on here?

The Covid-19 surge in India earlier this year appears to have limited impact on its financial market despite being one of the most trying times for the country in recent years. By August, India’s equity emerged as the best performing stock market in Asia with its market capitalisation crossing USD 3 trillion.

A series of successful IPOs in India this year attracted significant domestic investor participation, unlocking domestic savings and diversifying the investor base. A robust start-up ecosystem in India is driving market growth. Just in the first eight months of this year, at least 24 startups have already made it to the list of unicorns (start-ups valued at US$1 billion or more).[1]

What should I be looking out for?

From a macro-economic perspective, India is in a strong position with record-high foreign exchange reserves, reasonable current account balance, and much improved corporate balance sheet. Current forex reserves (of around US$641 billion) indicates that the country will be able to fund any outflow without any runaway currency depreciation.[2]

Over a longer term horizon, India’s favorable demographic and rising GDP per capita bring about long term growth drivers for the country. India has a population of 1.3 billion, of which 63.5% are in the working age segment (15-59 years). India’s ‘demographic dividend’ (defined by the United Nations Population Fund (UNFPA) as the growth potential that results from shifts in a population’s age structure) is expected to last until 2055. India’s GDP growth per capital (CAGR) in the last 15 years to 2020 stood at 6.28%, higher than the emerging market average of 2.76% in the last 15 years.

Our recommended fund: UTI India Dynamic Equity Fund

Disclaimer: The information and materials contained in this document are provided strictly for information purposes only and should not be considered an offer, recommendation or solicitation, to deal in or enter into any investments or funds. The information and materials are not to be relied on as investment, legal, tax, regulatory or other advice, as they do not take into account the investment objectives, financial situation or particular needs of any specific investor. Any research or analysis used to derive, or in relation to, the information and materials herein have been procured by UOB Kay Hian for its own use, and may have been acted on for its own purpose. The information and materials herein, including any opinions or forecasts have been obtained from or are based on sources believed by UOB Kay Hian to be reliable, but UOB Kay Hian does not represent or warrant the accuracy, adequacy, timeliness or completeness of the same, and expressly disclaims liability for any errors or omissions. As such, any person acting upon or in reliance of these information and materials does so entirely at his or her own risk. Past performance is not necessarily indicative of future performance. Any projections or other forward-looking statements regarding future events or performance of countries, markets or companies are [intended only to illustrate hypothetical results and) not necessarily indicative of, and may differ from, actual events, performance or results. No warranty whatsoever, expressed or implied, is given and no liability whatsoever is accepted by UOB Kay Hian or its affiliates, for any loss to anyone, arising directly or indirectly, from the use of this document or  any action or omission made in reliance of any information, opinion or projection contained herein. This document is not directed to or intended for distribution to or use by any person or any entity located in a jurisdiction where it would be contrary to applicable law or otherwise trigger a financial services licensing requirement.  The information and materials herein shall not be disclosed, used or disseminated, in whole or part, and shall not be reproduced, copied or made available to others for any purpose. UOB Kay Hian reserves the right to make changes to the information and materials, including any opinions or forecasts expressed herein at any time, without notice.

[1] Please see “Here Are The 24 Indian Startups That Entered The Unicorn Club In 2021,” Inc24, 3 September 2021, https://inc42.com/buzz/indian-startups-that-entered-the-unicorn-club-in-2021-in-india/

[2] Reserve Bank of India, as of 10 September 2021

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