Nitesh Patel

Insync believes he is a man for constructive change in India but one needs to be very selective in taking direct exposure in the country and prefers multinationals with exposure to the growing Indian middle class

Indian-born fund manager, Nitesh Patel, believes that Narendra Modi is the man who has the attributes to modernise India and is pleased that Australia got a taste at the G20 of his straightforward approach to change.

“I was born and spent my early life in the Gujarat State where Modi was a successful Chief Minister (Premier) who threw open this precinct to international investment. The change he wrought on one Indian state is being amplified across India in his early tenure as Prime Minister.

“One example of the speed of change he is creating was his campaign to open banks account for the poor. He broke down the traditional way of running government to expedite this process. Traditionally a task like this would have taken many years or decades due to the bureaucracy. He is a man that is determined to break the 67-year old way of running Indian governments.

“Modi demanded that the poorest get access to bank account and within a short period of time 70 million bank accounts were opened. He tasked a deadline 150 days for this to be initiated.

“For investors he has started to break the shackles of state-run organisations and allowed 100% foreign direct investment in the Indian railway network, the life blood of the economy. While still early days, Modi will need to continue what he has achieved so far to be deemed a true reformer,” said Nitesh Patel, Portfolio Manager, Insync Funds Management.

Companies in the Insync Global Titans fund source less than 5% of their revenue in aggregate from India.

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Nitesh Patel

Insync Fund Managers dynamically implements index put strategies to protect its international equities portfolio.

As the markets have significantly recovered from their 2009 lows and valuations on many equity markets are high Insync believes that investors should increasingly focus on preserving the return.

With rising markets comes complacency reflected in the volatility of equity markets recently reaching record lows. Insync have taken advantage of the low volatility by increasing the level of protection.

“Our DNA is ‘growth with protection’ and we established a downside protection strategy when we started the Fund. During the last two periods of high volatility, during the EU crisis and US debt debacle, the equity markets fell sharply whilst the Insync’s Global Titans Fund increased in value.

“Unlike passive funds, we concentrate on truly “exceptional” global companies that constitute only a small part of any major index and not generally available in Australia,” said Nitesh Patel, Portfolio Manager at Insync.

Insync seeks ‘exceptional’ companies that have resilient business models and consistently provide:

• High ROIC
• Highly visible and low volatile earnings stream
• Resilient and dominant market positioning
• Growth potential through innovation or new markets
• Strong free cash flow yield.
• Strong shareholder yield and focus of consistent and growing dividends/buybacks

The favoured sectors for Insync include growth opportunities in:

• Global healthcare
• Information technology
• Global consumer brands
• Media – Pay TV and content

“The arguments for including international equities in a portfolio is not only based on diversification for its own sake but also to access sectors that are not available in Australia.

“A relatively strong currency, due partly to the yield differential with the major economies, has continued to hurt he Australian economy. However it does offer investors the opportunity to buy quality offshore assets at attractive prices,” said Mr Patel.

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