Schroder Oriental Income Fund Limited

Asia Equities

Rated Fund 2013, 2015-19. A trust with a solid and growing income

Schroder Oriental Income has been managed since its launch in 2005 by Matthew Dobbs, who is based in London. It has featured in our Rated Funds in every year bar one since 2013 and was highly commended in Money Observer’s trust awards in 2014.

Despite price volatility, the trust’s dividend growth has been consistent. Over the life of the trust, dividends in Asia have grown at roughly twice the rate seen in the UK, enabling the fund to grow its dividend every year since inception. It has a yield of 4.1%, paid quarterly.

Dobbs has long experience of Asian markets and can draw on Schroders’ analysts in the region. His focus is on firms that can pay sustainable dividends. He seeks out quality companies with strong balance sheets as well as good cash flows and corporate governance that he can buy at attractive valuations.

He believes Asia is an attractive place to invest, thanks to the region’s scope for growth and dynamism. He contends that dividend investing remains relevant, given the trust’s strong quality bias and some defensive qualities, especially in view of heightened global uncertainty and risk aversion.

In Asia payout ratios have scope to increase as profitability and free cash flows rise. Structural improvements to corporate governance, aided by regulatory changes in some markets, further underpin longer-term rises in dividend payouts.

Shares in the trust have traded within a range of a premium of 3% to a discount of 7% over the past three years. At the end of 2018 they could be bought at close to par – reflecting the value of underlying assets.

Narrative and ratings content all as of January 2019.

See all Money Observer rated funds
Name
Schroder Oriental Income Fund Limited
Manager
Schroders Investment Management
Type
Closed Ended Investment Company
ISIN
GB00B0CRWN59
Sector
Asia Pacific Income
Launched
28/07/2005
OCF
0.84 %
Risk Rating
4
3 Year Sharpe
0.97
3 Year Alpha
2.02
Yield
3.9 %
Benchmark
MSCI AC Pacific Ex Japan GR USD
Fund Size
£ 711.94 million
NAV
266
Gearing
103
Discount Premium
2
To invest in a diversified portfolio of investments, primarily equities and equity-related investments, of companies which are based in, or derive a significant proportion of their revenues from the Asia Pacific region. The portfolio is diversified across a number of industries and a number of countries in that region. The portfolio may include government, quasi-government, corporate and high yield bonds and preferred shares.
Holding %
Taiwan Semiconductor Manufacturing Co Ltd 5.89 %
Samsung Electronics Co Ltd Participating Preferred 4.78 %
Fortune Real Estate Investment Trust 4.12 %
Swire Pacific Ltd Class A 3.32 %
China Petroleum & Chemical Corp Class H 3.19 %
Kerry Properties Ltd 2.90 %
HSBC Holdings PLC 2.84 %
National Australia Bank Ltd 2.79 %
Midea Group Co Ltd A Shares Wts 19/06/2019 (Ubs) 2.51 %
Sands China Ltd 2.46 %
Region %
Asia - Developed 53.54 %
Asia - Emerging 19.38 %
Australasia 16.53 %
United Kingdom 6.63 %
Sector %
Financial Services 21.03 %
Real Estate 19.12 %
Technology 16.43 %
Industrials 9.60 %
Communication Services 9.34 %
Basic materials 8.85 %
Consumer Cyclical 7.21 %
Name
Schroders Investment Management
Address
EC2V 7QA, London, United Kingdom
Legal Structure
Closed Ended Investment Company

Managers

Matthew Dobbs
Joined 07/28/2005

Matthew Dobbs is Head Global Small Companies/Specialist Asia at Schroders, which involves running a range of specialist equity portfolios and funds. He joined Schroders in 1981 and is based in London.

Data provided by Morningstar.

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You should be aware that prices may fall as well as rise and that the income derived can go down as well as up. When buying or selling any investment that fluctuates in price or value you may get back less than you invested. Past performance is not necessarily a guide to future performance.