Ashoka India Equity’s (AIE) management team uses detailed cash-flow analysis to pick a concentrated portfolio of what they view as the most attractive Indian equities, aiming to outperform the market in all macro environments thanks to stock selection. The team looks for the most compelling investment opportunities across the market capitalisation spectrum, with over 50% of the current AIE portfolio invested in mid caps and small caps. This stock selection process uses a unique approach to cashflow analysis developed by Prashant Khemka, the founder of the management company, and former head of India and global emerging market equities at Goldman Sachs. The team believes this approach is superior to the standard valuation metrics fund managers use as it properly captures the cash generative qualities of a business. The performance of the strategy suggests there may be value in this approach: since launch in July 2018, AIE has strongly outperformed the market thanks to stock selection, as we discuss in full in the Performance section. It has done so with steady outperformance in rising and falling markets too. The track record of the investment approach itself is longer, both in other funds run by the adviser company White Oak Capital Management, and in Prashant’s time at Goldman Sachs. AIE offers access to a process which has taken years to hone, and the track record indicates success in making stock selection the source of returns rather than sector or market cap weight. Another key element to the process is the focus on corporate governance and forensic accounting. This has so far helped the team avoid various frauds and irregular accounting blow-ups that have affected some Indian companies and mainstream funds exposed to them. The White Oak Capital teams focus on finding companies where management’s interests and those of any controlling shareholders are strongly aligned with those of minority shareholders. The team are locally based in Mumbai, and as such bring local knowledge to this endeavour. AIE has been constructed with similar ideas in mind about aligning interests. At the portfolio level, the analysts are compensated predominantly based on an attribution analysis of their sectors’ contribution to the portfolio performance. At the trust level, there is no management fee but only a performance fee worth 30% of the outperformance of the benchmark, the full details of which are in the Charges section. There is also an annual redemption facility which allows investors to exit in full at NAV less costs. AIE has only £69m in net assets, although it has been growing steadily thanks to strong performance leading to demand for issuing shares – the trust has mainly traded on a premium since launch. Last November the board announced a one-year issuance programme which allows it to issue up to 125 million shares (at a premium) over the course of the next year through a variety of means (see the Discount section).