Aberdeen New India invests in high quality growth stocks in the Indian stock market with the aim of generating long-term capital returns. The trust has outperformed the market handsomely over the past five years thanks to good stock selection, although the past few months have been more difficult. As the market has sold off, the managers have extended use of the trust’s gearing facility to take advantage of cheaper valuations on offer in stocks that have fallen. The trust offers exposure to the huge domestic market in India, which is growing thanks to favourable demographics, with significant allocations to consumer staples companies and financial services companies that are rolling out services to the growing middle class. The discount is at 15%, near to the cheapest end of its five-year range, having widened from the under 10% it reached during 2017’s bull market. The trust hasn’t paid a dividend since 2005, and is unlikely to do so this year, with the managers focused entirely on capital growth.
