Schroder Asia Total Return (ATR) has announced its annual results for the year end 31 December 2024. The company delivered a NAV total return of 13.0%, outperforming the MSCI AC Asia Pacific ex Japan index which rose by 12.1%. This is the ninth year in the last decade that the company has outperformed the reference index, resulting in double digit annualised returns for long-term investors. The share price total return was 12.6% as the discount widened slightly. The company has recommended a final dividend of 11.50 pence per share, maintaining the dividend at the same level as the previous financial year, for a 12 month yield of 2.44%.
It was a year of two halves for performance, with the majority of the gains made in the first half of the year. Taiwanese technology stocks, particularly those linked to artificial intelligence (AI), fared well and the company’s overweighting to Taiwan was a contributor to outperformance. Taiwan Semiconductor Manufacturing Company (TSMC), the company’s largest holding, made substantial gains buoyed by demand for its advanced semiconductors and stellar performance from Nvidia in the United States. The portfolio managers’ stock selection contributed to performance across most markets, particularly in Australia and Singapore, while the use of derivatives was also additive.
Discussing the performance, and the outlook for the trust, chair Sarah Macaulay commented:
“Geopolitics continues to dominate headlines as the world reacts to new policies emanating from the recently elected Trump administration. In particular, the US President’s use of tariffs and the threat of more is disruptive to global trade and has significant consequences throughout the region. The expectation of imminent interest rate cuts in the US has dwindled as inflation remains stubbornly high, putting pressure on Asian currencies. China’s economic growth prospects are hampered by lacklustre domestic consumption, the long and slow unwinding of the property bubble and excessive provincial debt. However, much of this is already reflected in Asian valuations which are at all time relative lows to developed markets.
“Our portfolio managers continue to find exciting investment ideas in the region and with an index agnostic investment approach stock selection will remain critical. Our two portfolio managers have decades of collective investment experience and an excellent long-term track record of delivering value to shareholders. Schroders has a large, well-resourced team of analysts in Asia that provides a depth of research across the region with a universe of 900 companies covered and around 2,700 company visits each year. We remain confident that our portfolio managers are well positioned to navigate diverse and challenging equity markets in the region.”
ATR: Another year of outperformance for Schroder Asia Total Return
