30th May 2014 11:14
LONDON (Alliance News) - Schroder AsiaPacific Fund PLC Friday said its net asset value produced a total return of 0.9% per share in the first-half, outperforming the benchmark index which produced a negative return of 0.2%.
Chairman Rupert Carington said returns for sterling investors, such as the fund, were weakened by the rise in the strength of the sterling against the currencies in the region.
"The last 12 months have been a difficult time to make money in Asia. Partly this has been because of sterling's strength, but also there have been several cautionary factors for the region, US monetary policy amongst others, to stop the markets making much progress. In the most recent six months, the rise in the company's net asset value has had to rely on outperformance by the manager rather than on market movement," Carington said in a statement.
"Share valuations, while below-average, are not exceptionally low, so the markets need earnings growth to attract attention. A cyclical recovery in the West is often a trigger for this, while the region continues to offer the potential for above-average domestic consumption growth," Carington added.
In its report for the six months ended March 31, the fund's manager, Schroder Investment Management Ltd, said the primary factor behind the outperformance in the first half was stock selection, most notably in Hong Kong, Taiwan, and China, with smaller contributions from stock choice in India, Singapore and Indonesia.
"The only areas of significant shortfall were in Korea and Thailand. Country positioning was a small negative with the positive impact of the underweighting in China offset by overweighting Hong Kong and underweights in Indonesia and Malaysia. By sector, stock selection was notably strong in industrials and financials, but lagged in information technology and materials," the investment manager said.
"The most significant change in the portfolio over the first half has been the increase in exposure to India where we moved from an underweight to overweight stance. This was primarily funded from cash (and we moved into a modestly geared position) along with reductions to Hong Kong and Korea. We also added modestly to China, though remain cautious overall on that market. In ASEAN, Thailand has remained the main overweighting, though we have continued to monitor the political situation closely," the investment manager said.
Schroder AsiaPacific Fund shares were Friday quoted at 248.55 pence, down 1.0%.
By Samuel Agini; [email protected]; @samuelagini
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