India Excel Fund, launched on April 15 by Excel Funds Management Inc, has appreciated almost 9 per cent since, with August alone accounting for a 5 per cent rise. "This translates into an annual growth rate of approximately 23 per cent," said Excel president Bhim Asdhir.

The fund is being managed in India by the BCIAMC, a joint venture between the Aditya Birla group and the Capital Group of Companies of the US.

Asdhir said Indian markets' weak correlation with North American and Asian markets was in fact the strength of India Excel Fund as it gave an excellent opportunity to Canadian investors to diversify a North America-focussed portfolio.

The weak correlation has left India virtually untouched at a time of turbulence worldwide due to the crises in east Asia and Russia. According to JardineFleming, in the past five years, India's correlation coefficient against the US was zero, compared with 0.51 of Hong Kong, 0.12 of Pakistan, 0.13 of Sri Lanka and 0.17 of Japan. Because of this "very weak correlation to the North American markets... India is clearly an effective way for investors to diversify their domestic portfolio," Asdhir said. Excel Funds invests in medium and big size companies only, Asdhir said.

There's no withholding tax on capital gains as Excel Funds' investments are routed through Mauritius. India and Mauritius have an agreement to avoid double taxation and that gives Excel protection from withholding tax on capital gains in short-term investments and on capital gains in long-term investments, he added.

"Seventy per cent of their investments in Excel Funds is coming for software industry," Asdhir told India Abroad New Service. "We place an emphasis on investing in India's software industry as rupee depreciation actually boosts the margins of computer software servicescompanies, considering their dollar-denominated revenues. India's software industry has grown over 50 per cent per year over the past five years (and) the current government is committed to expanding this industry from $2-billion to $50-billion in ten years' time," he noted. Ten per cent of what Excel Funds is able to mop up from Canada is being invested in liquid Canadian companies and 90 per cent in middle to large Indian firms, Asdhir said.