26th Jun 2015 11:02
LONDON (Alliance News) - Aberdeen New Dawn Investment Trust PLC is well placed to benefit from young populations, rising wealth and building demand for consumer goods in the Asia Pacific region, its chairman said on Friday.
The trust is managed by Aberdeen Asset Management Asia Ltd and aims to generate capital growth by investing in equities in the Asia Pacific region excluding Japan.
Comparing its performance against the currency-adjusted MSCI All Countries Asia Pacific ex Japan Index, the trust said its net asset value total return was 17.1% in the year ended April 30, compared with the benchmark's 22.7% in sterling.
Chairman David Shearer said it isn't out of the ordinary for the trust to underperform against the benchmark in the "frothy conditions" of "loose" monetary policy.
Shearer said investors are focused on the risk of capital flight from emerging markets, drawing attention to the expectation of an increase in US interest rates later this year, though he was clear that a rate hike isn't all bad news.
"There is however a silver lining as such a move by the Federal Reserve also means that the American economy is well on the road to recovery. This is good news for Asian exporters and a number of these leading names are held within the company's portfolio," Shearer said.
"Beijing, despite ongoing concerns over its decelerating economy, has sufficient resources to avert a hard landing, and oil prices are expected to stay low for some time, giving policymakers the latitude to enact supportive measures," Shearer said.
"Coupled with young populations, rising wealth and pent-up demand for consumer goods, these factors should underpin the region's growth prospects for the foreseeable future, and the company's portfolio is well placed to capitalise on this potential," Shearer said.
Aberdeen New Dawn Investment Trust shares were down 1.8% at 174.00 pence on Friday midday.
By Samuel Agini; [email protected]; @samuelagini
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