London, UK, 18 December 2018
Edison issues initiation on Aberdeen Asian Income Fund (AAIF)
Aberdeen Asian Income Fund (AAIF) aims to provide its investors with an attractive income, plus the potential for capital growth, by investing across the Asia Pacific region. The fund's target c 4.5% yield is fully funded from portfolio income. AAIF's investment process is bottom-up, with a strong focus on finding quality companies at attractive valuations. The managers meet all the companies they hold at least twice a year, and place great emphasis on understanding each company's balance sheet and growth drivers to ensure everything in the c 40-70 stock portfolio is worthy of its place. AAIF's quality and income focus means it has a natural bias to some more defensive areas, which could stand it in good stead in the current bout of market volatility. Its managers note that valuations in Asia are low in relation to Europe, North America and their own historical averages, and some individual stocks are very inexpensive versus history.
At 14 December 2018, AAIF's shares traded at an 11.1% discount to cum-income net asset value. This was wider than the 12-month average, following a fall in stock markets in early December. The shares have broadly traded between a 5% and a 10% discount to NAV since April 2016 (averaging 9.1%, 8.3% and 5.3% respectively over one, three and five years), and the board actively manages the discount by buying back shares when it exceeds 5%. AAIF offers a dividend yield of 4.7%.
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