Merrill Lynch Investment Managers has launched the Merrill Lynch International Investment Funds India Fund in the UK, to tap into India's outsourcing bonanza. Extensive infrastructure investments in India are likely to support strong growth which in turn will fuel domestic demand for basic materials and capital goods, said MLIM. The fund seeks to take full advantage of these developments and has positioned itself in order to benefit from the themes of infrastructure investments, domestic consumption and outsourcing. Richard Royds, head of UK retail for MLIM, said: “One of the key factors in managing a specialist fund is to make use of local talent and knowledge, for cultural awareness is an important factor in a market which is not comprehensively covered by investment research. By leveraging our joint venture with DSP Merrill Lynch Fund Managers in India, we have extensive ‘on the ground’ presence which allows superior insights into the market.” Indian equity markets have been volatile during this month and have fallen on low stockmarket trading. Unwinding of leveraged positions by retail investors have added to the volatility. In addition, MLIM said that it will ensure the portfolio is diversified at any point in time to reduce company specific risk. MLIM said it believes that most of these leveraged positions has largely been unwound, so that while further volatility in the near term cannot be ruled out, long term investors can be confident of the strong economic and corporate fundamentals. Mr Royds added: "We expect to see renewed buying interest in the near term and remain bullish on Indian equities.” The MLIIF India Fund will invest at least 70 per cent of its assets in equities and equity-related securities of issuers domiciled in India.