US LNG exports surge but will buyers in China turn up?
LONDON - Schroder AsiaPacific Fund PLC (LSE:SDP) has announced its half-year financial results ending March 31, 2025, experiencing a net asset value (NAV) total return of -3.3%. This performance contrasts with the MSCI AC Asia ex Japan Index, which saw a total return of -2.2%, and outperforms the weighted average peer group return of -4.5%.
Over a longer time horizon, Schroder AsiaPacific Fund has achieved a five-year NAV total return of 51.4%, surpassing the benchmark’s 36.1% up to March 31, 2025. Notable contributors to the fund’s performance include strategic stock selection in Singapore-listed banks and an overweight position in Hong Kong, which benefited from its proximity to China and rallied.
Despite the overall negative return in the short term, the fund’s underweight position in China, a market that faces structural issues according to the fund managers, posed a relative challenge. However, the fund’s management team, led by Abbas and Richard, adjusted their positions by selectively adding high-quality Chinese companies to the portfolio, demonstrating flexibility and maintaining valuation discipline.
In response to the fund’s wide discount, which averaged 11.9% throughout the period, the board engaged in share buybacks, which proved to be NAV accretive. Additionally, the board has reduced the rate of the first tier of charges, improving the fund’s competitiveness regarding fees.
Chairman James Williams expressed a positive long-term outlook for the region, citing "favorable demographics, rising wealth levels, and steady growth in domestic demand across many markets" as the basis for compelling long-term opportunities.
The analysis provided by Kepler Trust Intelligence acknowledges the fund’s impressive long-term returns and the pragmatic approach of the management team in mitigating risks and capitalizing on opportunities. The recent cut in charges and the fund’s performance, despite short-term headwinds, are highlighted as potentially attractive to long-term investors.
This report is based on a press release statement and aims to present a balanced view of the Schroder AsiaPacific Fund’s performance and strategic decisions.
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