Over the six month period to 30 September 2016, Martin Currie Asia Unconstrained reports that, on a total return basis, the net asset value of the company increased by 19.5% while the share price gained 18.5%. The results are ahead of the headline GDP for countries in our universe growing approximately 10.8% over the last twelve months in sterling terms. An interim dividend of 2.6p (2.5p) will be paid on 23 December 2016 to shareholders on the register on 2 December 2016 representing a 4% increase in last year’s interim dividend.
The manager’s report says their performance was achieved without exposure to cyclical stocks, which were a key feature of the rally in Asian markets. Within the portfolio, investments in the technology sector, most notably Tencent, Taiwan Semiconductor Manufacturing Company (TSMC) and Samsung Electronics, led performance. In all three cases, strong business performance has driven share prices higher. The overall performance in the financial sector was strong too, with positive contributions from life-insurer AIA and HSBC Holdings standing out in particular. AIA continues to see strong growth in demand for its products across Asia, while a share buyback by HSBC ignited interest in that stock. Indian consumer stocks Maruti Suzuki and Hero Motocorp also performed well; both firms are experiencing improving domestic demand, driven in part by attractive new product launches.
Company-specific factors were behind the portfolio’s poorly performing stocks. In particular, weak results at Genting Berhad’s Singapore casino operations contributed to a negative return on the fund’s investment in that stock over the half year. Elsewhere, the share of electric-motor manufacturer Johnson Electric suffered in the first three months of the reporting period on disappointing earnings, although this was partially reversed as data emerged to suggest that an improvement was underway in the business. The third-largest detractor from returns was Indian IT service firm Infosys. Demand for the Infosys’s services in the US – its largest market – is going through a soft patch.
MCP : Martin Currie Asia Unconstrained helped by technology exposure