Aberdeen Asia Focus (AAS), the top-performing Asia smaller companies trust, delivered a 22.3% investment return in the year to 31 July. The leap in net asset value (NAV) underpinned a 23.9% for shareholders and beat the 9.5% rise in the MSCI AC Asia ex Japan Small Cap index. The strong annual result under Aberdeen managers Gabriel Sacks and Ng Xin Yao saw the £580m easily pass its five-year conditional tender offer test in August, declaring it had beaten the benchmark by 29.4%. Chair Krishna Shanmuganathan said: “Stock selection in IT, particularly in Taiwan, has been a strong driver of relative performance alongside positive contributions from other industries, countries and stocks in the region, reflecting the balanced and diverse nature of the portfolio.”
QuotedData senior analyst Richard Williams said: “An excellent year for Aberdeen Asia Focus, with returns comfortably ahead of its benchmark, extending an impressive record of outperformance across multiple time periods. Successful stock selection among Taiwanese technology companies was a major contributor, with the managers identifying beneficiaries of AI infrastructure investment beyond the more obvious large-cap semiconductor names. Encouragingly, gains were not confined to technology, with industrial and infrastructure holdings also contributing positively. The trust’s outperformance of 29.8 percentage points over the five-year assessment period means its performance-linked tender offer has not been triggered, providing further evidence of the strength of its long-term record. The managers have sensibly taken profits where valuations have become stretched, while maintaining exposure to structural growth opportunities across the region. Despite the strong performance, the shares continue to trade at a discount of around 9%, suggesting that the market has yet to fully recognise the trust’s achievements.”
Aberdeen UK Smaller Companies Growth Trust’s (AUSC) last set of results underline why it agreed to merge with JPMorgan UK Small Cap Growth & Income (JUGI) last month. The underlying net asset value (NAV) total return fell 4.1% in the year to 30 June compared to the 6.1% rise in the Deutsche Numis Smaller Companies plus AIM index, though shareholders’ actual loss was smaller at 3.6%. Chair Liz Airey said the results extended the NAV underperformance to three and five years. While many UK small-cap funds, including JUGI, had trailed the benchmark in the past year due to the exceptional strength of gold and precious metals miners, she said the bulk of AUSC’s underperformance stemmed from stock-specific issues rather than asset allocation. The company also spent £83.7m buying back 26.5% of its shares at an average discount of 9.2%, increasing the board’s concerns that the £227m trust was becoming “sub-scale”. Details on the shareholder meetings needed to approve the merger with JUGI will follow by early November. As the December annual general meeting is unlikely to go ahead, the board has declared a second interim dividend that does not require shareholder approval. The 9.5p proposed payment will take the total for the year to 14p, a rise of 6.1%.
Richard Williams said: “A disappointing final set of annual results for AUSC supports the board’s case for merging with JUGI. The 4.1% decline in NAV total return compares unfavourably with the benchmark’s 6.1% gain and extends the trust’s underperformance across one, three and five years. While UK smaller companies have faced a challenging backdrop, the board acknowledges that stock selection, rather than sector positioning, was primarily responsible for the shortfall. Perhaps more telling is the scale of share buybacks required to contain the discount, with AUSC repurchasing 26.5% of its issued share capital during the year alone, which have substantially reduced the trust’s size. Against this backdrop, the proposed combination with JUGI looks a pragmatic solution, offering shareholders access to a larger, more liquid vehicle with a stronger long-term performance record, or the opportunity to exit at a price close to NAV.”
Golden Prospect Precious Metals (GPM), the £83.5m mining fund that completed its switch from CQS Manulife to Baker Steel this month, expects to move from Guernsey to the Main Market of the London Stock Exchange on 30 October. A prospectus for the move that was announced in July will be published on 27 October. The listing on Guernsey’s International Stock Exchange will be cancelled on 20 November. Shareholders are not required to take any action.
The company, which allows shareholders to subscribe for one new share for every five they own on 30 November each year, has adjusted the price of its fourth subscription rights offer. Reflecting the 1.77p per dividend being paid tomorrow, the price has been lowered to 101.35p from 103.12p.
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