Results analysis from Kepler Trust Intelligence

Fidelity Asian Values (FAS)

28/10/2025

Results analysis from Kepler Trust Intelligence

Fidelity Asian Values (FAS) has released its annual results for the year ending 31/07/2025, with a NAV total return of 12.4%, beating its benchmark which returned 7.1%. FAS also outperformed its peer group average return of 7.8%.

Contributors to outperformance stem from a wide range of sources. The top contributor was a semi-conductor firm benefiting from the AI boom, second was an Australian gold mining firm and third was a long-held Vietnamese apparel manufacturer.

Gearing added an additional 250bps to relative performance, though the level was reduced over the period, reflecting the market recovery leading to higher valuations. Derivatives were used to short stocks which also generated additional alpha in the year.

FAS' share price performed well, leading to the discount trading at its narrowest point at the year end. This trend has continued since giving the trust the narrowest discount in the peer group. This has been aided by share buybacks, which added c. 70bps to NAV and have continued post results.

The trust announced a 41.4% increase in its dividend, driven by increase in underlying revenue as well as changes to the charging structure, now split across the capital account and to revenue.

Chair Clare Brady reflected on the good performance, highlighting that the trust: "Has been able to do so well against a backdrop of turmoil and extreme volatility [which] speaks to the fact that the fund offers investors excellent risk diversification" whilst also remaining positive on the outlook, noting the managers "continue to see good prospects for their portfolio of undervalued, quality businesses."

Kepler View

We believe these results are a strong validation of managers Nitin Bajaj and Ajinkya Dhavale's approach, with their contrarian mindset capturing market turning points that have been a feature of the period under review. Asian markets have been through considerable changes in the past year, and the managers' positioning in this environment was favourable, albeit purely a function of their bottom-up, stock selection focus, which has proven its worth. This has reinforced FAS' long-term outperformance of its benchmark which we believe demonstrates the quality of the approach.

Furthermore, the managers remain optimism for the future. Whilst the asset classes' aggregate valuations are at or above long-term averages, Nitin and Ajinkya's portfolio is trading considerably lower than the market on average. The trust's positioning remains highly differentiated too, especially with an allocation to China's 'old economy' stocks and to Indonesia. As such, we believe FAS is a unique proposition that offers diversification benefits and upside potential.

The improved dividend outlook has also been positive in our view. The tweaks to how charges are attributed are small, but have improved the long-term income potential considerably as more can be passed on as dividends, further adding to the trust's appeal.

These factors may well have contributed to the trust's discount narrowing. We think this creates attraction to both the recovery in the region, and the successful strategy of FAS' managers.

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