22nd Nov 2018 12:17
LONDON (Alliance News) - Schroder Oriental Income Fund Ltd on Thursday reported a reduction in net asset value per share for 2018 financial year due to a "rapid deterioration" in China-US relations.
The fund underperformed its benchmark, the MSCI All Countries Pacific excluding Japan Index, for the year ending August 31. Schroder Orential had a net asset value total return of 1.5%, marginally below the 1.8% of the reference index.
The fund's NAV total return the previous year was "in excess" of 20%. Chairman Robert Sinclair blamed the drop on the weakness of sterling - driven lower by the Brexit negotiations - and Asian equity markets being "less buoyant" - reflecting fears over US trade tariffs.
Schroder Oriental's NAV per share at August 31 decreased 2.2% to 252.94 pence from 258.63p the year before.
The fund's net assets increased slightly to GBP642.7 million from GBP635.5 million. Schroder Oriental shares in issue increased in the year to 254.1 million from 245.7 million.
The fund's manager, Schroder Unit Trusts Ltd, said rising US interest rates, a stronger dollar and tightening credit conditions in the region all contributed to the fund's performance.
The manager did say, however, performance "recovered somewhat" in the second half, as "heavyweight" internet stocks reversed first half strength.
The manager believes its stock selection was "strong" in China, Taiwan and Thailand but was offset by "weakness" in Hong Kong, Korea and New Zealand.
In sector terms, the fund was boosted by stock selection in IT, telecoms, real estate and consumer discretionary but was offset by materials and an insignificant exposure in healthcare.
Schroder Oriental increased its total dividend 6.8% to 9.40p from 8.80p paid last year.
Shares in Schroder Oriental were down 1.7% Thursday at 231.00 pence each.
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