Schroder Oriental Income says that over the 12 months ended 31 August 2024, it generated a NAV return of 18.2% and share price return of 15.3%, both well ahead of the return on its benchmark MSCI AC Pacific ex Japan Index in Sterling terms, which rose by just 8.6%.
Over the financial year, the company repurchased 11,395,000 shares at an average discount of 6.1%.
The dividend is 12p, up 1.7% on last year.
Extract from the manager’s report
Our significant underweight allocation to and strong stock selection in China was a major positive contributor to relative performance, as was stock selection in Taiwan, Korea and Hong Kong. In China, strong selection came from stocks such as Midea, a manufacturer of branded white goods including air conditioners, and an absence of some of the e-commerce companies that pay little or no dividend. Although our overweight to Hong Kong was a headwind, our stock selection there more than offset that, with telecom operator HKT Trust & HKT Ltd the standout performer. Positive stock selection in both Taiwan and Korea was also noteworthy, with IT companies the driver including fabless design house MediaTek, foundry TSMC and Hon Hai a contract manufacturer that is benefitting from the increased demand for high end servers used in AI. In Korea, companies that could benefit from an improvement in shareholder focus also did well, including non-life insurance company Samsung Fire & Marine. The ASEAN markets of Indonesia and the Philippines also made positive stock contributions through holdings such as Bank Mandiri and port operator ICTSI, as did the overweight to and stock selection in Singapore. Stock selection in Australia lagged, as our positive financials return was offset by our positions in resources and telecom operator Telstra. From a sectoral perspective, stock selection in and overweight to IT and financials were our main positive contributors. Stock selection in industrials, materials and consumer staples was also positive. The overweight to real estate was the biggest drag.
SOI : Schroder Oriental Income navigates weak Chinese market successfully