Schroder Oriental Income Fund Limited
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
|Taiwan Semiconductor Manufacturing Co Ltd||7.21 %|
|Samsung Electronics Co Ltd Participating Preferred||5.40 %|
|Fortune Real Estate Investment Trust||4.06 %|
|National Australia Bank Ltd||3.38 %|
|BOC Hong Kong Holdings Ltd||3.27 %|
|Sands China Ltd||3.14 %|
|Midea Group Co Ltd Wts 20/05/2020(Ubs)||3.03 %|
|Kerry Properties Ltd||2.80 %|
|Swire Pacific Ltd Class A||2.79 %|
|HSBC Holdings PLC||2.79 %|
|Asia - Developed||51.57 %|
|Asia - Emerging||20.67 %|
|United Kingdom||5.39 %|
|Financial Services||18.99 %|
|Real Estate||17.64 %|
|Communication Services||10.88 %|
|Basic materials||9.95 %|
|Consumer Cyclical||6.88 %|
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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