Emerging markets have had a tough year, amid fears the US Federal Reserve may stop printing quite as much money. It’s also been a year of upheaval for the Asian Total Return Investment Company (LSE: ATR).
Previously the Henderson Asian Growth Investment Trust, in March its board switched managers to Schroders, due to poor performance.
While new co-managers Robin Parbrook and King Fuei Lee have not had long to prove themselves yet, the offshore fund run by the pair – Schroder ISF Asian Total Return – has beaten its benchmark (the MSCI Asia Pacific ex Japan index) “by a considerable margin” over three and five years, notes Leonora Walters in the Investors Chronicle, as well as its peer average in “every calendar year since its inception in 2007”.
Parbrook and Fuei Lee are firmly at the investing coalface, respectively based in Hong Kong and Singapore. The trust aims to deliver a high rate of total return (so including both income and capital gains) through investing in stocks in the Asia Pacific region (excluding Japan). The annual management charge is 0.9%.
The trust favours small- to mid-cap shares, and is 33.5% invested in Hong Kong, with 7.7% of the portfolio in Australia and 7.4% in China. Just over a third is invested in financial stocks, with 20% in industrials and 18.1% in consumer goods.
Before the switch to Schroders, the trust traded at a discount to net asset value (in other words, the share price was below the value of the underlying assets), notes Walters.
However, after the change, the discount narrowed markedly and the trust even traded at a premium briefly. It now trades at a 2.7% discount, which looks a good entry point for anyone looking for long-term exposure to Asian equities, reckons Walters.
| Asian Total Return’s top ten holdings | |
|---|---|
| Company | % holding |
| Jardine Strategic Holdings | 4.20% |
| AIA Group | 3.70% |
| Jardine Matheson Holdings | 3.50% |
| Hyundai Motor Company | 3.50% |
| Taiwan Semiconductor Manuf. | 3.30% |
| HSBC Holdings | 3.20%% |
| Sun Hung Kai Properties | 3.10% |
| Brambles | 3.10% |
| Hong Kong Land Holdings | 3.10% |
| Kasikornbank | 2.6% |