Factsheet: Scottish Oriental Smaller Cos Ord

Asia Equities

Rated Fund 2013-2018. Focuses on small companies and capital preservation

This trust won Money Observer's Best Asia Pacific Trust award in 2014. Although some of its management team has since changed, we believe it will continue to deliver good long-term results. The advantage of investing in smaller companies in Asia is that they offer exposure to domestic consumption, which is growing strongly given the region's superior demographic profile and developing middle class.

The lead manager is Vinay Agarwal, a Singapore-based director of First State Stewart Asia. He is supported by Wee-Li Hee, an Edinburgh-based portfolio manager. They focus on capital preservation in both absolute and real terms. They favour small businesses with defensible franchises that should be long-term winners no matter what the economic and monetary backdrop. In this regard, the fund offers something different from those that have been riding the tech wave, and if there is a market sell-off it should provide some relative capital protection. In selecting investments, they look for businesses with strong cash flow generation and good balance sheets that have the potential to double in size over the next five years. The portfolio has become more concentrated under Agarwal and had around 60 holdings at the end of 2017. Currently, the managers are placing a significant emphasis on Indian companies, where they have more than a quarter of assets, and are finding both growth and some of the best management teams in Asia there. They have also found pockets of value in the Philippines and Taiwan.

Shares in the trust generally trade at a discount to net asset value and at the end of 2017 could be bought on an 11 per cent discount.

Narrative and ratings content all as of 01 January 2018.

See all Money Observer rated funds
Name
Scottish Oriental Smaller Cos Ord
Manager
First State Investments (UK) Ltd
Type
Closed Ended Investment Company
ISIN
GB0007836132
Sector
Asia Pacific - Excluding Japan
Launched
29/03/1995
OCF
1.18 %
Risk Rating
1
3 Year Sharpe
0.52
3 Year Alpha
2.00
Yield
1 %
Benchmark
MSCI AC Asia Ex Japan GR USD
Fund Size
£ 303.49 million
NAV
1,164
Gearing
100
Discount Premium
-15
To achieve long-term capital growth through investment primarily in smaller Asian quoted companies with market capitalisations under USD1,500m, or the equivalent at the time of investment. The Company may also invest in Companies with market capitalisations of between USD1,500m and USD3,000m although not more than 20 per cent of its net assets. For investment purposes the regions include: India, China, Sri Lanka, Thailand, Malaysia, Singapore, Indonesia, Hong Kong, South Korea, Taiwan, Philippines, Pakistan and Vietnam but excludes Japan and Australasia. Other Countries in Asia may also be considered with Board approval. The Company will invest no more than 15% of its gross assets in other listed investment companies and no more than 15% in securities of any one Company or Group.
Holding %
SKF India Ltd 3.66 %
Towngas China Co Ltd 3.60 %
Uni-President China Holdings Ltd 3.27 %
Sinbon Electronics Co Ltd 3.22 %
Concepcion Industrial Corp 3.00 %
China Banking Corp 2.86 %
Blue Star Ltd 2.81 %
Haw Par Corp Ltd 2.75 %
HealthCare Global Enterprises Ltd 2.75 %
Raffles Medical Group Ltd 2.70 %
Region %
Asia - Emerging 74.86 %
Asia - Developed 25.14 %
Sector %
Technology 19.88 %
Consumer Cyclical 19.76 %
Industrials 13.54 %
Healthcare 11.20 %
Consumer Defensive 10.08 %
Utilities 7.63 %
Basic materials 7.36 %
Financial Services 7.08 %
Name
First State Investments (UK) Ltd
Address
EC2M 7EB, London, United Kingdom
UCITS
No
Legal Structure
Closed Ended Investment Company

Managers

Vinay Agarwal
Joined 07/20/2016
Scott McNab
Joined 07/01/2015
Scott McNab
Joined 07/01/2015
Wee-Li Hee
Joined 07/01/2014

Data provided by Morningstar.

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