Baillie Gifford’s Mike Gush has increased exposure to India in the £119m Pacific Horizon investment trust after becoming bullish on the country’s economic growth prospects.
Gush boosted allocation India over the past six months on the belief domestic demand in the country will remain strong for some time.
“Over the period we have allocated more money to businesses located there. Despite a bad monsoon affecting agricultural production, economic growth has been remarkably strong with industrial activity picking up,” he says.
“Rural consumption remains very strong and we believe this will be a key driver of economic activity in the years ahead.”
While more then 40% of the fund is weighted towards China and Hong Kong, Gush is growing increasingly confident on South East Asia, especially as it has been one of the best performing areas over the past six months.
“Some of the strongest markets over the period have been in the ASEAN region,” he says.
“Economic growth in both Indonesia and Thailand has surprised on the upside and both nations have enjoyed a period of political stability over the past year.
“If the political background remains benign we believe the prospects for both countries could be better than most expect.”
The trust’s NAV rose 10.2% over the six months to 31 January, compared to 7.5% for the MSCI All Country Far East ex Japan index. It was trading at a discount of 11.3% on 12 March 2010.
