Asia Dragon Trust plc
New for 2020. A more conservative approach and overweights to India and Hong Kong
This investment trust has outperformed the index over one, three and five years. In our 2020 line-up it replaces Invesco Asia, which has disappointed. Asia Dragon is part of the Aberdeen Standard Investments stable, which has a large Asia-Pacific equities team of around 40, led by Flavia Cheong. She is named as a key person in the trust alongside co-managers Adrian Lim and Pruksa Iamthongthong, who joined Lim as co-manager towards the end of 2019.
In building a portfolio that has almost 70 holdings, the co-managers focus on quality and value. In looking for quality, they consider multiple factors, including franchise power, balance sheet strength and corporate governance. Analysts use valuation methods, including price/earnings and price/cash flow metrics, to assess a business or industry.
Following a period of underperformance, Lim has added aggressively to China holdings, taking the allocation from 15% in 2017 to 29% today, although this remains below the MSCI AC Asia ex Japan index’s 37% allocation.
The trust’s largest geographical overweight positions are to India and Hong Kong. Despite manufacturing, export, consumer and business confidence weakening in Asia, the managers point out that the region still contributes more than two-thirds of global growth and remains the world’s fastest-growing region. The trust’s focus on Asian consumer names has helped drive recent growth.
Charles Stanley analyst Rob Morgan likes Asia Dragon for more risk-averse investors. “The low-turnover, conservative style lends itself to outperformance in weak markets and can complement racier funds in the region.”
Narrative and ratings content all as of January 2020.See all Money Observer rated funds
|Tencent Holdings Ltd||9.61 %|
|Samsung Electronics Co Ltd Participating Preferred||8.73 %|
|Taiwan Semiconductor Manufacturing Co Ltd||7.25 %|
|Ping An Insurance (Group) Co. of China Ltd Class H||3.80 %|
|PT Bank Central Asia Tbk||2.88 %|
|Kweichow Moutai Co Ltd||2.83 %|
|China Resources Land Ltd||2.73 %|
|AIA Group Ltd||2.58 %|
|Housing Development Finance Corp Ltd||2.47 %|
|Oversea-Chinese Banking Corp Ltd||2.21 %|
|Asia - Emerging||64.02 %|
|Asia - Developed||35.22 %|
|Financial Services||24.43 %|
|Communication Services||12.62 %|
|Real Estate||8.30 %|
|Consumer Cyclical||7.63 %|
|Consumer Defensive||6.85 %|
Pruksa Iamthongthong is an Investment Director on the Asian Equities Team at Aberdeen Standard Investments. Pruksa joined Aberdeen Asset Management in 2007. Pruksa graduated with a BA in Business Administration from Chulalongkorn University, Thailand and is a CFA® charterholder.
Adrian Lim is a Senior Investment Manager on the Asian Equities Team. Adrian originally joined Aberdeen in 2001 as a Manager on the Private Equity Team, on the acquisition of Murray Johnstone, but transferred to his current post soon afterwards. Previously, Adrian worked for Arthur Andersen LLP as an Associate Director advising clients on mergers & acquisitions in the region. Adrian holds a BAcc from Nanyang Technological University, Singapore and is a CFA® charterholder. CFA® and Chartered Financial Analyst® are registered trademarks owned by CFA Institute.
Data provided by Morningstar.
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