Mugunthan Siva of India Avenue Investment Management, said it was “early days” for the India Avenue Equity Fund in New Zealand. It has been accepting Kiwi money for a year. The fund as a whole is now worth $20 million.

Over time, Siva said he would expect New Zealand investors to make up 5% to 10% of the total fund. It has about 50 listed Indian companies in its portfolio.

India offered a unique investment opportunity, he said, because its economy was firmly in a growth phase. Forty per cent of its population of 1.3 billion was aged 24 or under, and their spending power was growing.

India could be expected to triple its GDP per capita over the next 10 to 15 years, he said.

“It is coming from a low base but a lot of young people are going to be employed, that leads to more spending which creates that loop of productivity.”

The biggest hurdle to growing investment was education, eh said, New Zealand investors did not understand the Indian opportunity, he said.

They were more familiar with China because of the media attention it received.

Investors should realise that as well as being a high-growth area, India offered a diversification opportunity, he said. What would drive the Indian economy was different to what drove Australia and New Zealand. India could still perform well even if New Zealand markets were shaky,

“You’ve got some diversification benefit in the fact you’re invested in another currency but then when you take India the correlation is even lower because it’s a completely contrasting economy.”

The India Avenue Equity Fund rose 18.20% over the last year. Since inception, the fund is up 12.05% a year and has outperformed the index after fees by 0.69% a year. The Indian market fell 4.6% in local currency terms in February, on the back of both domestic and global market volatility