Aberdeen Asian Income’s results for the year that ended on 31 December 2014 show the fund generating a return on net assets of 7.6%, a bit behind the 9.5% return on the MSCI AC Asia Pacific ex Japan Index. The dividend was edged up from 7.9p to 8p and this was covered 1.03x. The fund moved to trade on a slightly smaller premium (1% vs. 1.8%) and so the return to shareholders was 6.7%.
The manager says the fund was outperforming the index until the fourth quarter of 2014 at which point Chinese banks, a sector where they are underweight, started to perform well and the fund’s net asset value was left behind. By contrast the Hong Kong based banks they did hold, HSBC and Standard Chartered, were also unhelpful for performance as they were hit by regulatory problems including fines and sanction violation investigations.
Giordano, the Hong Kong based clothing retailer, and Li & Fung were both hit by falling retail sales. Indonesian coal producer, Indo Tambangraya Mega, was weighed down by falling coal prices owing to slower demand from China. Also a lack of exposure to India, one of the region’s best performing stockmarkets in 2014, was unhelpful.
On the plus side, the fund’s Thai holdings did well on average. Electricity Generating and Hana Microelectronics both posted solid results and the share price of Advanced Info Service rose on hopes that the new government would restart the auction process for 3G spectrum licenses. In Singapore, Singapore Post did well on the back of an investment by Chinese internet giant, Alibaba. They also made money on a bond issued by Sri Lankan DFCC Bank.
AAIF : Aberdeen Asian Income Fund in the wrong banks