In the investment trust space, three funds offer exposure to high yielding shares in Asia. These are Aberdeen Asian Income (AAIF), Henderson Far East Income (HFEL) and Schroder Oriental Income (SOI).
Overall, there are limited differences between these three funds: yields are between 3.5 per cent and 4.6 per cent, none trades on a discounts beyond 1 per cent, all three have substantial revenue reserves and tend do to a good job of passing dividend growth on to shareholders.
However, in terms of dividend growth and net asset value (NAV) performance, the fund which leads the pack is the Aberdeen Asian Income Fund. The fund aims to provide investors with a total return by investing in Asian Pacific securities with an above average yield. Managed by Aberdeen's Asian Equities Team which is lead by experienced manager, Hugh Young, the fund is constructed without reference to a benchmark or stock market index.
Geographically the fund is well diversified with the highest exposure being in Singapore (20.7 per cent.) In May, the fund divested Hong Leong Bank as it no longer offered an attractive yield. In the telecom sector, it exited Telekomunikasi Indonesia in favour of a new position in China Mobile, which has a debt-free balance sheet, higher yield and better business prospects.
The managers remain cautious over the various headwinds facing the region in the short term such as inflation. They expect further monetary policy tightening and say a higher interest rate environment will moderate the pace of expansion. Another concern is the ongoing disruption to global supply chains in the wake of the earthquake in Japan which is creating production bottlenecks for manufacturers who are dependent on parts that are made in Japan.
ABERDEEN ASIAN INCOME FUND (AAIF) | |||
---|---|---|---|
PRICE | 169.50p | NAV | 166.88 |
SIZE OF FUND | £239.9m | PRICE PREMIUM TO NAV | 0.97 |
No OF HOLDINGS: | 40 | 5 YEAR PRICE PERFORMANCE | 11.22% |
SET UP DATE | 21-Dec-05 | 3 YEAR PRICE PERFORMANCE | 48.46% |
MANAGER START DATE | 21-Dec-05 | 1 YEAR PRICE PERFORMANCE | 79.26% |
VOLATILITY | 12.85 | TOTAL EXPENSE RATIO | 1.40% |
TRACKING ERROR | 9.7 | YIELD | 3.56% |
SHARPE RATIO | 1.46 | GEARING | 104.717 |
MORE DETAILS | asian-income.co.uk |
Source: Thomson Reuters Datastreaam & Aberdeen Asset Managers
Performance figures as at 24 June 2011
Top ten holdings (as at June 2011)
Holding | Percentage |
---|---|
Taiwan Semiconductor | 5 |
Deutsche Bank AG Indonesian Credit Linked Note | 5 |
Taiwan Mobile | 4.6 |
QBE Insurance | 3.9 |
Swire Pacific 'A' & 'B' | 3.9 |
Oversea-Chinese Banking crop | 3.9 |
United Overseas Bank | 3.6 |
British American Tobacco | 3.5 |
Digi | 3.3 |
Guinness Anchor | 3.3 |
Geographical Breakdown
Country | Percentage |
---|---|
Singapore | 20.7 |
Australia | 19.5 |
Malaysia | 13.4 |
Hong Kong | 11 |
Thailand | 9.9 |
Taiwan | 9.5 |
Indonesia | 5 |
China | 3.6 |
Philippines | 1.8 |
Japan | 1.5 |
New Zealand | 1.4 |
South Korea | 0 |
India | 0 |
Cash | 2.7 |