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A successful partnership is when parties come together and work towards a common goal, becoming greater than the sum of its parts. We aim to achieve that with the partnership on Indian equities between ÃÛ¶¹ÊÓƵ Asset Management and HDFC Asset Management Company (AMC).¹

As one of the largest domestic asset managers, HDFC AMC has a long history and track record of investing in India. Local access and on-the-ground presence add significant depth and breadth of expertise to their rigorous investment process. This local knowledge cannot be underestimated in a vast and diverse country like India, amid intense competition among asset management companies for alpha.

What is most exciting about the partnership though is that we share a common investment philosophy: a focus on quality and the long term, while maintaining a responsible, disciplined and largely bottom-up approach to fundamental based investing.

We are also connected by our common values and a conviction in the long-term India story, which would help steer our partnership forward.

The Indian economy has grown rapidly in the past 20 years and is on its way to becoming one of the major global economic superpowers. On the back of enduring growth, political stability, fiscal prudence and economic reforms, the equity market has performed well.

India is also a long-term growth story. Over the last two decades, large cap corporate earnings have increased at an 11% annualized growth rate, aiding the compounding of returns in the stock market.² Should real GDP growth stay around 6 percent – and there are multiple drivers to support that – we believe earnings could continue to expand in the low double digits in the decade to come.

However, short-term challenges do exist and investors should not expect India’s growth journey to be a straight line upwards. On one hand, consumption growth is faltering hurt by weak urban demand. On the other hand, corporate capex remains lackluster. This drag is partly offset by resilient rural spending and buoyant government spending.

Any global economic slowdown would certainly have a negative effect on India’s economic outlook as well. The escalation of trade tensions worldwide, due to the size and scale of the US tariffs, introduces further uncertainties to global growth. India’s economy, being more domestically driven and having a lower exposure to goods traded with the US compared to some of its peers, could be relatively less impacted. Hence, while India’s growth may slow down, it should continue to stand out in a global environment of anemic and slowing growth.

However, in the short-term export-oriented companies in sectors such as metals, chemicals, auto components and jewelry are vulnerable to US tariff vagaries, with pharmaceuticals, automobiles, textiles, agriculture and food products also at risk. Potential trade disruptions and second order impact on business and consumer sentiment could also hinder growth in the near term.

Despite the global disruptions, India is still a long-term, multi-faceted story, with broad themes supporting its investment case. India’s strengths—such as a highly skilled engineering workforce, competitive labor costs, a growing role in global supply chain diversification, and increased political clout on the world stage—position the country for even greater international influence. These advantages are reinforced by a robust domestic economy, which is benefitting from rising wealth, improved infrastructure and supportive government policies.

India’s growth is well diversified, which is a key strength of the economy, and the stock market. There are quality companies across the spectrum of economic activities – in consumption, investment, manufacturing, services and exports. This provides a platform for investors to diversify across sectors, which in turn allows for a better risk adjusted return profile.

Ultimately, the combined expertise of the ÃÛ¶¹ÊÓƵ and HDFC partnership puts us in a unique position to identify investment opportunities in the India market. The disciplined application of fundamental research in combination with careful risk management guides us to focus on companies with potential for sustainable and profitable growth. At the same time, these opportunities have to come at a reasonable price. Our medium- to long-term perspective on growth naturally translates into a more holistic, long-term view of valuations, avoiding short-term market noise.

A rigorous bottom-up research process that reaches across sectors and industries is rooted in deep knowledge of Indian markets and companies. Being on the ground is a critical advantage as we are able to take a deeper look at companies and assess them in-person on management quality and governance. We look for telltale signs of sustainable strength, paying special attention on the rights and equitable treatment of minority shareholders as well as disclosure and transparency.

Taken together, India's diversified economic growth presents a wealth of alpha opportunities, and the ÃÛ¶¹ÊÓƵ-HDFC collaboration aims to capitalize on this long-term potential. 

^1ÌýÃÛ¶¹ÊÓƵ Asset Management (Singapore) Ltd has entered into an Investment Advisory agreement with HDFC Asset Management Company Limited.
^2ÌýSource: Bloomberg. NIFTY 50 Index. Earnings are for the period FY04-FY25.