Fund Manager/Team Overview
Lead manager of this trust, Richard Sennitt, has been following Asian markets for well over 20 years. He is based in London and is supported by a well-resourced team of regionally based analysts and fund managers. He has managed this trust in its current format since 2021. Mr Sennitt is also the lead manager on the trust's open-ended version, Schroder Asian Income. Mr Sennitt works closely with portfolio manager Abbas Barkhordar, who joined the firm around 15 years ago, and is based in London too.
Investment Philosophy & Process
The managers believe that income generation will provide a substantial portion of the Asian markets total return over the long term. They ultimately look for companies that offer attractive yields and have growing dividends. Each stock in the portfolio must have a sound income story and must either already offer an attractive yield or have the potential to grow its dividend over time. The managers do not chase high yielding stocks for the sake of yield, rather they prefer firms that have robust cash flows and balance sheets, which allows them to continue paying dividends as they grow. Often, these have disciplined management teams in place, sensible growth plans and are focused on growing shareholder returns. At the margin, they also buys stocks where they believe there is the potential for a dividend surprise. The managers have a strong valuation approach, focusing on a stock's upside to fair value and are careful not to purchase quality at any price. They draw on the best ideas of Schroder's Asia Pacific ex Japan Equities research team, comprising of circa 40 career analysts based in Hong Kong, Shanghai, Singapore, Taipei, Sydney, Mumbai and London. The research process focuses on discovering what a business is fundamentally worth and to do this, the analysts assess the quality of the management team, the company's capability of sustaining its returns, reinvestment opportunities and earnings potential. The resultant portfolio will have 60 to 80 holdings, where investments will primarily be in large and medium sized companies. The mandate permits the managers plenty of freedom to invest where they see value, although there are some broad parameters at the stock, sector and country level, which they use as a sanity check. The managers have access to ample analytical tools, such as Schroders' risk management systems to ensure that they are not exposing the portfolio to any unintended risk.
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Fund ESG Integration
Although the trust does not have an ethical mandate, the firm's Asian equity team of analysts and managers will look at various environmental, social and governance factors in their assessment of a stock's attractiveness, and for instance they will consider a company's history of corporate governance. Indeed, much of the company fundamental analysis and visits conducted by the team of analysts and managers in the region are to consider these non-financial factors and they will analyse environmental, social and governance issues in as much as they are relevant to an investment case. The analysts and fund managers have a range of proprietary tools to help them analyse the various risks and opportunities.
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