WEBVTT 00:00:00.000 --> 00:00:03.437 align:middle line:90% [MUSIC PLAYING] 00:00:03.437 --> 00:00:20.150 align:middle line:90% 00:00:20.150 --> 00:00:21.320 align:middle line:90% Hi, my name is Amit Mehta. 00:00:21.320 --> 00:00:24.560 align:middle line:84% I'm a Portfolio Manager on the JPMorgan Indian Investment 00:00:24.560 --> 00:00:25.190 align:middle line:90% Trust. 00:00:25.190 --> 00:00:28.070 align:middle line:84% I've been part of the Emerging Markets and Asia-Pacific team 00:00:28.070 --> 00:00:30.170 align:middle line:90% at JPMorgan for over a decade. 00:00:30.170 --> 00:00:32.810 align:middle line:84% I've been in the investment industry for over two decades. 00:00:32.810 --> 00:00:34.670 align:middle line:84% I'm also supported on the Indian Investment 00:00:34.670 --> 00:00:37.580 align:middle line:84% Trust by my colleagues Ayaz Ebrahim 00:00:37.580 --> 00:00:40.850 align:middle line:84% based in Hong Kong and Sandip Patodia based here in London. 00:00:40.850 --> 00:00:44.910 align:middle line:90% 00:00:44.910 --> 00:00:47.030 align:middle line:84% So the team's a lot more than just 00:00:47.030 --> 00:00:48.530 align:middle line:84% about the three portfolio managers 00:00:48.530 --> 00:00:50.100 align:middle line:90% that I mentioned earlier. 00:00:50.100 --> 00:00:54.350 align:middle line:84% We have a strong breadth and depth of analytical research. 00:00:54.350 --> 00:00:57.800 align:middle line:84% We have the ability to both have industry experts who 00:00:57.800 --> 00:01:00.930 align:middle line:84% are based in many geographies around the world. 00:01:00.930 --> 00:01:05.810 align:middle line:84% But also, we have the ability to do on-the-ground research 00:01:05.810 --> 00:01:08.450 align:middle line:84% by having analysts that are based in India. 00:01:08.450 --> 00:01:10.580 align:middle line:84% And this is a real advantage for us 00:01:10.580 --> 00:01:13.370 align:middle line:84% because it allows us to not only just cover 00:01:13.370 --> 00:01:15.440 align:middle line:84% the large and mega caps, where you 00:01:15.440 --> 00:01:18.390 align:middle line:84% do need to have some level of global expertise, 00:01:18.390 --> 00:01:21.510 align:middle line:84% but also go all the way down into the small and midcap 00:01:21.510 --> 00:01:23.160 align:middle line:84% businesses, where actually, there 00:01:23.160 --> 00:01:26.910 align:middle line:84% is a huge advantage of having people based on the ground that 00:01:26.910 --> 00:01:29.430 align:middle line:84% can go and visit the companies, the operations, 00:01:29.430 --> 00:01:32.400 align:middle line:84% see the corporate managements, but also 00:01:32.400 --> 00:01:35.850 align:middle line:84% take those judgments around culture, languages, 00:01:35.850 --> 00:01:38.100 align:middle line:84% preferences, which may be different to when you're 00:01:38.100 --> 00:01:39.810 align:middle line:90% meeting large-cap businesses. 00:01:39.810 --> 00:01:43.020 align:middle line:84% So it's the balance between having industry experts 00:01:43.020 --> 00:01:46.110 align:middle line:84% and local expertise that's a real advantage for us 00:01:46.110 --> 00:01:47.430 align:middle line:90% on the investment trust. 00:01:47.430 --> 00:01:49.590 align:middle line:84% And the way we manage the investment trust 00:01:49.590 --> 00:01:52.350 align:middle line:84% is using the depth and breadth of all of those resources 00:01:52.350 --> 00:01:54.570 align:middle line:84% to be able to find the types of investment ideas 00:01:54.570 --> 00:01:55.560 align:middle line:90% that we're looking for. 00:01:55.560 --> 00:01:59.880 align:middle line:90% 00:01:59.880 --> 00:02:01.610 align:middle line:84% So for us, the management of the trust 00:02:01.610 --> 00:02:06.030 align:middle line:84% is very much starting with the corporate-level decision. 00:02:06.030 --> 00:02:10.100 align:middle line:84% So what we're looking at is firstly, 00:02:10.100 --> 00:02:11.870 align:middle line:90% is it a great business? 00:02:11.870 --> 00:02:15.500 align:middle line:84% And we try to identify that by thinking about, what 00:02:15.500 --> 00:02:18.620 align:middle line:84% is the long-term potential of that particular business? 00:02:18.620 --> 00:02:20.600 align:middle line:84% What is the levels of profitability? 00:02:20.600 --> 00:02:22.700 align:middle line:90% And how long will they sustain? 00:02:22.700 --> 00:02:26.030 align:middle line:84% And particularly in emerging markets, 00:02:26.030 --> 00:02:29.660 align:middle line:84% it's really important to have a view about the people running 00:02:29.660 --> 00:02:33.080 align:middle line:84% those businesses and how aligned their interests 00:02:33.080 --> 00:02:34.950 align:middle line:90% are with minority shareholders. 00:02:34.950 --> 00:02:37.790 align:middle line:84% So we spend a lot of time thinking about the governance 00:02:37.790 --> 00:02:40.577 align:middle line:84% and the governance frameworks around the businesses 00:02:40.577 --> 00:02:41.910 align:middle line:90% that we're looking to invest in. 00:02:41.910 --> 00:02:44.450 align:middle line:84% So the first thing that we're trying to assess 00:02:44.450 --> 00:02:46.280 align:middle line:90% is the corporate quality. 00:02:46.280 --> 00:02:49.130 align:middle line:84% And that really starts with asking very simple questions 00:02:49.130 --> 00:02:51.410 align:middle line:84% around the people running the businesses, 00:02:51.410 --> 00:02:53.720 align:middle line:84% the long-term outlook, the underlying economics 00:02:53.720 --> 00:02:55.490 align:middle line:90% and profitability. 00:02:55.490 --> 00:02:59.720 align:middle line:84% After we've made those judgments around corporate quality, 00:02:59.720 --> 00:03:03.440 align:middle line:84% then we think about whether we think we're going to make 00:03:03.440 --> 00:03:05.540 align:middle line:90% an attractive long-term return-- 00:03:05.540 --> 00:03:08.030 align:middle line:84% the valuation decision, essentially. 00:03:08.030 --> 00:03:10.110 align:middle line:84% But it is very much in that order. 00:03:10.110 --> 00:03:13.770 align:middle line:84% So the first thing is about, can we find great businesses? 00:03:13.770 --> 00:03:16.520 align:middle line:84% And I'd say that, actually, India as a market 00:03:16.520 --> 00:03:18.980 align:middle line:84% is a pretty fertile ground for finding 00:03:18.980 --> 00:03:21.560 align:middle line:84% businesses of a high level of corporate quality. 00:03:21.560 --> 00:03:23.870 align:middle line:84% So then it's about the idea around, 00:03:23.870 --> 00:03:26.120 align:middle line:84% can we make an attractive return? 00:03:26.120 --> 00:03:29.750 align:middle line:84% And we get lots of questions around the valuation premium 00:03:29.750 --> 00:03:33.350 align:middle line:84% that you're expected to pay in places like India. 00:03:33.350 --> 00:03:36.710 align:middle line:84% And I would say you need to connect valuations 00:03:36.710 --> 00:03:39.770 align:middle line:84% both with the long-term opportunity 00:03:39.770 --> 00:03:43.310 align:middle line:84% but also with the levels of profitability 00:03:43.310 --> 00:03:45.800 align:middle line:84% that the corporate sector in India provides. 00:03:45.800 --> 00:03:48.950 align:middle line:84% And I would say that India as a market 00:03:48.950 --> 00:03:53.060 align:middle line:84% is one of the most profitable underlying markets 00:03:53.060 --> 00:03:54.230 align:middle line:90% around the world. 00:03:54.230 --> 00:03:58.130 align:middle line:84% And secondly, I think it's the area that most understand 00:03:58.130 --> 00:04:01.050 align:middle line:84% very well, to be the most attractive growth 00:04:01.050 --> 00:04:02.170 align:middle line:90% market around the world. 00:04:02.170 --> 00:04:05.340 align:middle line:84% So there is certainly an expectation from my perspective 00:04:05.340 --> 00:04:08.280 align:middle line:84% that there is a justified reason to having 00:04:08.280 --> 00:04:11.040 align:middle line:84% much higher valuations and premiums 00:04:11.040 --> 00:04:14.175 align:middle line:84% in the Indian market versus other markets around the world. 00:04:14.175 --> 00:04:18.910 align:middle line:90% 00:04:18.910 --> 00:04:21.490 align:middle line:84% From a top-down perspective, India 00:04:21.490 --> 00:04:24.790 align:middle line:84% continues to look like a very attractive growth opportunity. 00:04:24.790 --> 00:04:29.770 align:middle line:84% And that comes from expectations of double-digit economic growth 00:04:29.770 --> 00:04:33.760 align:middle line:84% supported by low and falling inflation, which 00:04:33.760 --> 00:04:35.500 align:middle line:84% will help to continue to keep interest 00:04:35.500 --> 00:04:39.490 align:middle line:84% rates at current levels or continue to see them falling. 00:04:39.490 --> 00:04:42.160 align:middle line:84% Now, that's the sort of economic backdrop. 00:04:42.160 --> 00:04:46.960 align:middle line:84% But also supporting all of that is a number of initiatives 00:04:46.960 --> 00:04:48.610 align:middle line:84% that we've seen in the market-- one 00:04:48.610 --> 00:04:53.830 align:middle line:84% being the beginnings of corporate CapEx cycle, which 00:04:53.830 --> 00:04:55.480 align:middle line:84% I would say that's been an area that's 00:04:55.480 --> 00:04:57.940 align:middle line:84% been relatively disappointing in the last decade. 00:04:57.940 --> 00:05:00.040 align:middle line:84% And our expectation is actually the next decade 00:05:00.040 --> 00:05:03.130 align:middle line:84% looks much better for an investment perspective. 00:05:03.130 --> 00:05:06.190 align:middle line:84% Unlike other developed or emerging markets, 00:05:06.190 --> 00:05:08.537 align:middle line:84% there isn't legacy infrastructure 00:05:08.537 --> 00:05:09.620 align:middle line:90% that they need to rely on. 00:05:09.620 --> 00:05:11.453 align:middle line:84% So there's an ability to skip-- particularly 00:05:11.453 --> 00:05:15.040 align:middle line:84% in things like telecoms, where you're able to skip the legacy 00:05:15.040 --> 00:05:17.590 align:middle line:84% infrastructure or digital and banking 00:05:17.590 --> 00:05:21.440 align:middle line:84% that you can get yourself into the most modern technologies. 00:05:21.440 --> 00:05:23.360 align:middle line:84% And that should really help particularly 00:05:23.360 --> 00:05:25.670 align:middle line:84% in things like digital penetration, your ability 00:05:25.670 --> 00:05:28.100 align:middle line:84% to reach further and further into rural markets. 00:05:28.100 --> 00:05:30.140 align:middle line:84% And then even in industries like technology, 00:05:30.140 --> 00:05:33.470 align:middle line:84% where you're seeing a much more balanced growth, particularly 00:05:33.470 --> 00:05:35.570 align:middle line:84% in having more and more women in the workforce, 00:05:35.570 --> 00:05:37.910 align:middle line:84% and just getting more and more of that diversity agenda 00:05:37.910 --> 00:05:41.110 align:middle line:84% right up front, rather than having to think about that once 00:05:41.110 --> 00:05:42.860 align:middle line:84% you've got to a much more developed state. 00:05:42.860 --> 00:05:47.160 align:middle line:90% 00:05:47.160 --> 00:05:49.620 align:middle line:84% So look, I think there are three reasons 00:05:49.620 --> 00:05:53.250 align:middle line:84% to think about the JPMorgan Indian Investment Trust. 00:05:53.250 --> 00:05:56.592 align:middle line:84% One, which I've already talked about, is the people. 00:05:56.592 --> 00:05:58.050 align:middle line:84% And as I said, it goes much further 00:05:58.050 --> 00:06:00.840 align:middle line:84% than just the portfolio management team 00:06:00.840 --> 00:06:02.850 align:middle line:84% but the depth and breadth of the resources 00:06:02.850 --> 00:06:07.060 align:middle line:84% that we have from our analyst teams across the world. 00:06:07.060 --> 00:06:10.380 align:middle line:84% Two, it's that long-term approach. 00:06:10.380 --> 00:06:13.080 align:middle line:84% And India, again, lends itself to a market 00:06:13.080 --> 00:06:15.420 align:middle line:84% that you want to take a very long-term view 00:06:15.420 --> 00:06:18.630 align:middle line:84% about investments and not worry about short-term trading 00:06:18.630 --> 00:06:19.390 align:middle line:90% opportunities. 00:06:19.390 --> 00:06:23.010 align:middle line:84% And I think there's a depth and breadth of opportunities to be 00:06:23.010 --> 00:06:24.840 align:middle line:90% able to find investment ideas. 00:06:24.840 --> 00:06:27.840 align:middle line:84% And thirdly, being able to leverage 00:06:27.840 --> 00:06:30.960 align:middle line:84% the nature of investment trust structure 00:06:30.960 --> 00:06:32.970 align:middle line:84% and going further and further down 00:06:32.970 --> 00:06:34.980 align:middle line:84% the market cap spectrum, which again connects 00:06:34.980 --> 00:06:37.182 align:middle line:84% very well with the depth of resources 00:06:37.182 --> 00:06:39.390 align:middle line:84% that you need to be able to take those opportunities. 00:06:39.390 --> 00:06:41.880 align:middle line:84% So again, being able to find investment ideas 00:06:41.880 --> 00:06:44.730 align:middle line:84% in that small and midcap area, where 00:06:44.730 --> 00:06:47.980 align:middle line:84% you're likely to see the most attractive growth 00:06:47.980 --> 00:06:48.563 align:middle line:90% opportunities. 00:06:48.563 --> 00:06:49.980 align:middle line:84% So I would say those are the three 00:06:49.980 --> 00:06:52.540 align:middle line:84% key reasons to think about the JPMorgan Indian Investment 00:06:52.540 --> 00:06:53.040 align:middle line:90% Trust. 00:06:53.040 --> 00:06:56.760 align:middle line:90% 00:06:56.760 --> 00:06:57.260 align:middle line:90% Yes. 00:06:57.260 --> 00:06:59.630 align:middle line:84% And look, I think for us, it's all about, as I said, 00:06:59.630 --> 00:07:01.850 align:middle line:84% the bottom-up, the company-level decisions. 00:07:01.850 --> 00:07:05.210 align:middle line:84% We spend a lot of time before we make 00:07:05.210 --> 00:07:06.500 align:middle line:90% investments in any businesses. 00:07:06.500 --> 00:07:09.620 align:middle line:84% We spend a lot of time meeting company managements, 00:07:09.620 --> 00:07:12.410 align:middle line:84% understanding how they see the outlook 00:07:12.410 --> 00:07:13.940 align:middle line:84% for their own businesses, how they 00:07:13.940 --> 00:07:16.070 align:middle line:84% see the long-term opportunities, how they 00:07:16.070 --> 00:07:18.560 align:middle line:90% think about capital allocation. 00:07:18.560 --> 00:07:20.990 align:middle line:84% Do they think that they need to grow their business 00:07:20.990 --> 00:07:23.720 align:middle line:84% to reach certain hurdles or certain targets? 00:07:23.720 --> 00:07:26.960 align:middle line:84% How does M&A fit into that-- so mergers and acquisitions 00:07:26.960 --> 00:07:28.710 align:middle line:90% versus organic opportunities? 00:07:28.710 --> 00:07:31.490 align:middle line:84% So for us, it's very much about the company-level decision 00:07:31.490 --> 00:07:32.240 align:middle line:90% first. 00:07:32.240 --> 00:07:34.880 align:middle line:84% I think, on top of that and layered on top of that, 00:07:34.880 --> 00:07:39.170 align:middle line:84% I think there are plenty of thematic opportunities 00:07:39.170 --> 00:07:40.490 align:middle line:90% within the market. 00:07:40.490 --> 00:07:42.260 align:middle line:84% And obviously, the three big themes 00:07:42.260 --> 00:07:44.330 align:middle line:84% that you see across the portfolio 00:07:44.330 --> 00:07:49.490 align:middle line:84% comes from, one, the change in consumer habits and behaviors. 00:07:49.490 --> 00:07:50.990 align:middle line:84% And that's really going to be driven 00:07:50.990 --> 00:07:52.698 align:middle line:84% by the change in the income pyramid 00:07:52.698 --> 00:07:54.740 align:middle line:84% that you're going to see over the next few years. 00:07:54.740 --> 00:07:57.318 align:middle line:84% And there's lots of estimates around how much that might be. 00:07:57.318 --> 00:07:59.610 align:middle line:84% But there's a potential over the next five or six years 00:07:59.610 --> 00:08:03.840 align:middle line:84% to have close to another 100 million people 00:08:03.840 --> 00:08:06.960 align:middle line:84% coming into that middle-income bracket, which again, increases 00:08:06.960 --> 00:08:08.460 align:middle line:90% the propensity to consume. 00:08:08.460 --> 00:08:13.090 align:middle line:84% Secondly, the area that we have significant exposure to, again, 00:08:13.090 --> 00:08:15.030 align:middle line:84% is around the financials industry. 00:08:15.030 --> 00:08:16.440 align:middle line:84% And again, that's an area that we 00:08:16.440 --> 00:08:18.960 align:middle line:90% see a huge long-term potential. 00:08:18.960 --> 00:08:20.580 align:middle line:84% And that really comes from levels 00:08:20.580 --> 00:08:24.360 align:middle line:84% of credit penetration continuing to be relatively low in India 00:08:24.360 --> 00:08:27.610 align:middle line:84% versus other both emerging and developed economies. 00:08:27.610 --> 00:08:31.260 align:middle line:84% So whilst the industries here remain relatively fragmented, 00:08:31.260 --> 00:08:34.809 align:middle line:84% we still see strong opportunities for growth there. 00:08:34.809 --> 00:08:37.710 align:middle line:84% And thirdly, it's an area that has been obviously talked 00:08:37.710 --> 00:08:39.851 align:middle line:84% about a lot in the past but continues 00:08:39.851 --> 00:08:41.309 align:middle line:84% to be an area of opportunity, which 00:08:41.309 --> 00:08:43.559 align:middle line:84% is the onshoring and offshoring side. 00:08:43.559 --> 00:08:46.290 align:middle line:84% In India, IT services sectors being 00:08:46.290 --> 00:08:48.210 align:middle line:84% one of the most attractive growth areas 00:08:48.210 --> 00:08:49.380 align:middle line:90% for a long period of time. 00:08:49.380 --> 00:08:52.020 align:middle line:84% We really don't see that changing, considering 00:08:52.020 --> 00:08:55.080 align:middle line:84% the level of gap in salaries and wages 00:08:55.080 --> 00:08:58.142 align:middle line:84% that the Indian population receives 00:08:58.142 --> 00:08:59.350 align:middle line:90% versus the rest of the world. 00:08:59.350 --> 00:09:02.460 align:middle line:84% So I think those are three big broad themes that we 00:09:02.460 --> 00:09:04.722 align:middle line:84% continue to see as underpinned for the majority 00:09:04.722 --> 00:09:05.430 align:middle line:90% of the portfolio. 00:09:05.430 --> 00:09:08.780 align:middle line:90% [MUSIC PLAYING] 00:09:08.780 --> 00:09:22.000 align:middle line:90%