27th Mar 2014 16:13
LONDON (Alliance News) - Aberdeen Asian Income Fund Ltd Thursday said its net asset value total return fell by 2.55% over 2013, trailing the 1.73% increase in the MSCI AC Asia Pacific ex-Japan Index.
The share price total return fell by 9.2% over the period.
Total dividends for the year amounted to 7.9 pence, an increase of 10.5%.
Investment manager Aberdeen Asset Management Asia Ltd said the portfolio underperformed for a number of reasons.
"First, we have heavy exposure to Southeast Asia but are underweight to North Asia. Markets in China, Korea and Taiwan performed better than their Southeast Asian counterparts because they appeared more geared towards a US recovery," the investment manager said in its review.
"Second, we favour the consumer sector because we are positive about the outlook, which is one of low debt, credit expansion and rising wealth. We have found some quality companies there, many of which are well-managed, conservative in approach and have low borrowing levels. This often translates to a net cash position and solid returns on equity and assets. During the year, our overweight to this more defensive sector detracted from performance, as cyclical industries, such as information technology, outperformed."
"Third, a Fed tapering and the prospect of rising interest rates hurt high-yielding stocks in the region. This affected our property holdings, particularly real estate investment trusts, and utilities stocks," the investment manager added.
The investment objective of the company is to provide investors with a total return primarily through investing in Asian Pacific securities, including those with an above average yield. Within its overall investment objective, the company aims to grow its dividends over time.
The company compares its performance against the currency-adjusted MSCI AC Asia Pacific (ex Japan) Index. The company's portfolio is constructed without reference to any stockmarket index.
Aberdeen Asian Income shares were Thursday quoted at 182.70 pence, up 0.2%.
By Samuel Agini; [email protected]; @samuelagini
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