Schroder Oriental Income Fund draws on revenue reserve to boost dividend as NAV total return ends year negative

Fri, 13th Nov 2020

Schroder Oriental Income Fund has reported a negative performance in its annual results but increased its dividend as it cited the 'remarkable resilience' of Asian economies. For the year to 31 August 2020, the Fund announced the share price produced a total return of negative 3.9%, while the net asset value (NAV) total return for the financial year was negative 0.9%. Chairman Peter Rigg said: 'In an environment where the rise in regional markets was driven by lower yielding growth stocks, which do not produce the income the company is targeting, we believe this is a good result.' He added he was 'reassured' by the subsequent recovery in NAV, up by 6% since the year end. The company increased its dividend, drawing 'modestly' on its revenue reserve to cover the 7% fall in revenue earnings per share during the year, while dividends declared by the company over the year totalled 10.3p. It confirmed that remaining revenue reserves were equivalent to nearly eight months of the dividend at current levels. Rigg said: 'Asian economies have shown remarkable resilience to date and the reduction in income has been much more modest than that of the United Kingdom, demonstrating the company's value as a diversifier away from UK income.' The company reported that demand for shares had been strong during the first nine months of the financial year and a total of 8.5 million shares were issued at a premium to NAV, but that since the summer, demand has been 'more volatile' and the share price ended the year at a small discount to NAV. Story provided by

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