Results analysis from Kepler Trust Intelligence

Schroder Asian Total Return (ATR)

20/03/2026

Results analysis from Kepler Trust Intelligence

Schroder Asian Total Return (ATR) has released its annual report for the year ending 31/12/2025. Over the year, the trust saw a NAV per share increase of 14.2%, and a share price total return of 19.3%. This compares to a 20.6% total return for the reference index. Good absolute performance continues to support long-term returns, with ATR considerably outperforming the reference index over five years, although this is not a consideration for the managers. Furthermore, the trust was promoted to the FTSE 250 Index, which may broaden its appeal to a wider group of investors.

Positive contributors to performance came from stock selection in Taiwan, predominantly technology holdings, although this was offset in relative terms by low exposure to Korean stocks and stock selection in China and Hong Kong.

The trust's discount narrowing notably throughout the year although there were no share buybacks.

Managers Robin Parbrook and King Fuei Lee used gearing actively throughout the year as part of their hedging strategies. This contributed positively to performance although the managers have been reducing gearing into the year end and post period.

Robin and King Fuei added selectively to China due to better capital return policies, and taking profits from their technology holdings on valuation ground. In exchange, they have added more defensive exposure, as well as to India albeit remaining very selective given valuations.

Revenue increased slightly, leading to a maintained dividend, with the trust having solid reserves.

Chair Sarah MacAulay reflected on the broader macro issues, noting the managers' approach "helps to reduce downside and volatility [and] gives us continued confidence in the strategy."

Kepler View

We believe Schroder Asian Total Return (ATR) is an attractive proposition in the Asia Pacific sector due to the managers' process that incorporates bottom-up and top-down factors which can mitigate some of the nearer term challenges, whilst also capturing the long-term growth potential of the asset class. In light of the current market volatility, this approach could be particularly appealing, in our view.

With opportunities to invest in the managers' open-ended equivalent limited, combined with the strong long-term performance track record, we believe the discount, which narrowed in the year, is currently well supported at these levels.

Whilst absolute performance has again been strong, relative returns are more challenged, although we note this is not a consideration of the managers. This has come from some challenging scenarios, although the managers have subsequently reappraised the potential these, and added selectively where their outlook has changed.

Elsewhere, the managers have added to more defensive markets as they have identified better risk reward opportunities. This has been funded from profit taking in the technology allocations. In our view, these changes reinforce the notion that ATR provides long-term exposure to the region's potential, whilst also mitigating some of the nearer term risks.

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