Investment trust insider on Asian income – James Carthew: Abrdn Asian Income a ‘solid way to play Asia’
Until the recent tech stock selloff, this Asia equity income fund was clawing back its performance after a difficult few years.
The dire state of the Chinese stock market has weighed on listed funds focused on Asia for some time now.
Investment trusts focused on the region tend to be unloved as a result – the only one trading at a premium (currently around 3%) is Henderson Far East Income (HFEL), and that seems to be solely the result of its excessively high dividend yield, which is currently 10.7%. The compromise for such a high yield appears to be relatively weak total return performance. Over the past five years, shareholders have lost money.
However, there are alternatives. One of these is Abrdn Asian Income (AAIF), which, over five years, has made investors about 25%. I recently caught up with manager Yoojeong Oh, who was over from Singapore visiting investors.
AAIF has a £330m market value, making it the third largest of five trusts with an Asian income remit. The shares trade on an 11.2% discount, but if it were on the same rating as HFEL, the two trusts would be about the same size.
AAIF was launched in 2005, the same year that Oh (pictured below) joined Abrdn. The trust was affected by the global financial crash in 2008 but had a great run afterwards, hitting a share price peak in 2013 that it is yet to surpass. The peak in net asset value (NAV) was much more recent – January 2022 – but it was clawing its way back until the recent tech selloff.
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