India houses more than 17% of the global population with a median age of just 28 years and is on track to become the world's third-largest economy by 2027.
We have long followed this trend, backing quality stocks in low penetration, large addressable markets such as banking, healthcare and discretionary consumption that tend to prosper as young, vast populations become wealthier.
However, as with most areas of the global economy, the coronavirus pandemic has led to short-term disruption in our area of focus this year.
Amid the market chaos, herd investing rooted in the belief that Covid-19-19 would permanently impair the nation's economic progress has seen many of its domestic growth sectors take a large hit.
Nevertheless, we believe the long-term prospects for India remain robust. As such, we have seized the opportunity to leverage what we see as a stark dislocation between perception and reality to maximise returns for our investors.
Over the hump?
When it comes to business disruption, we believe India is closer to the end than the beginning.
Readers will have seen many headlines about rising coronavirus cases, but there is more to the story.
Reported death rates among the country's young, hardy population have been lower than what has been reported in Europe or North America, and declines in critical cases and infection rates have already been reported in Delhi and Mumbai - two of the country's major cities.
With the development of better treatments and potential vaccines in the works, an encouraging pace has been set for the rest of India and we expect things to look very different in six months.
For companies, the most encouraging development has been the reopening of India in June after it was decided that the country's economy simply could not sustain an indefinite lockdown.
Rightly or wrongly, the easing of restrictions has thrown down the gauntlet for a return to "normality" for Indian citizens, and we believe that this will look a lot more like the pre-lockdown India than the market fears.
After all, India remains on track to become a leading economic force over time. And as the market's faith in India's long-term domestic growth story returns, we expect many depressed areas to enjoy a sharp, sustained rebound.
To position for this, we have added to or taken in sectors with the brightest long-term outlook while they continue to look cheap.
Picking sector leaders
As we have already seen in China, increased per capita GDP creates large new addressable domestic growth markets where well-positioned firms can thrive.
But while we are positioned for this same chain of events in India, we are also cognisant of the fact that many Indian stocks will suffer irreparable damage this year.
A firm with a weak balance sheet and model is just that - not even the strongest macro positioning in the world can protect it from a lockdown that cuts off its revenues for a sustained period.
We avoid this by specifically identifying sector-leading stocks.
This means they not only sit in a large and growing addressable market, but they also boast increasing market share, a widening competitive advantage, strong management and - perhaps most critically in 2020 - a strong balance sheet.