London, UK, 11 August 2017
Edison issues review on Schroder AsiaPacific Fund (SDP)
Schroder AsiaPacific Fund (SDP) invests in markets across the Asia Pacific region (excluding Japan) with the aim of achieving capital growth. Managed by Matthew Dobbs since launch in 1995, the trust is the largest and among the most liquid in its peer group. It has produced top-quartile NAV total returns over one, three and five years, also beating its benchmark MSCI AC Asia ex-Japan index over one, three, five and 10 years in both NAV and share price terms. In spite of this, it trades at a wider discount than the peer group average. The manager focuses on companies with visible earnings growth, strong management, sustainable cash flows and valuation support. While sector and geographical weightings are an output of stock selection, there is a significant allocation towards Greater China and the information technology sector. Reflecting the growing level of dividends from Asian companies, SDP has a yield of just over 1%.
At 9 August 2017, SDP's shares traded at a 10.5% discount to cum-income NAV. This was wider than the 12-month low of 8.7% seen in late July, as the share price lagged a rising NAV, narrower than the one-year average of 12.0% and broadly in line with three- and five-year averages. The board may buy back shares when the discount exceeds 10%, but prefers not to interfere with the natural liquidity of the shares. Although SDP is focused on capital growth, the portfolio does generate some income, substantially all of which is paid out as dividends. Based on the current share price, SDP yields 1.1%.
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