Low Chinese exposure helped Schroder Oriental – Schroder Oriental Income Fund has published results for the year ended 31 August 2021. The company beat its benchmark by a decent margin over the period, producing an NAV return of 21.9% against that the MSCI Pacific ex Japan Index’s 12.3%. The dividend is 10.5p, up from 10.3p last year. 0.2p of the dividend was funded from reserves.
The discount didn’t change much over the period. During the year the company repurchased 2,800,000 shares at an average discount of 5.0%, and a further 2,325,000 shares at an average discount of 4.2% have been repurchased since the financial year end.
Extract from the manager’s report
“The Company’s positive NAV total return of 21.9% over the period compared favourably with that of the reference benchmark which rose 12.3% over the period. The increased expectations for a global recovery benefitted the fund as it saw earnings revisions broaden out from a narrow set of growth names. This saw our stock selection in and allocations to Korea and Taiwan adding value, helped by our overweight positions in information technology. Stock selection in Australia and New Zealand contributed positively thanks to overweights in the diversified resource and other materials companies. The other major contributor to relative performance was the significant underweight to China where the regulatory clampdown impacted returns. Here the internet names (where we don’t have any exposure as they pay little or no dividend) bore the brunt of this. In Singapore, stock selection was a headwind with many of the Real Estate Investment Trust (“REIT”) names lagging as rate expectations ticked up and ongoing impacts of COVID delayed ‘normalisation’, which was also the case with Macau gaming which detracted given the delays to the opening up of international travel. The underweights to the smaller markets of Malaysia, Indonesia and the Philippines as well as overweight Singapore were positive.”
SOI : Low Chinese exposure helped Schroder Oriental