Scottish Oriental Smaller Companies Trust Plc
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
|Vitasoy International Holdings Ltd||3.93 %|
|SKF India Ltd||3.69 %|
|Haw Par Corp Ltd||3.43 %|
|Sinbon Electronics Co Ltd||3.16 %|
|Towngas China Co Ltd||3.14 %|
|Raffles Medical Group Ltd||3.12 %|
|Delta Electronics (Thailand) PCL||3.04 %|
|Jyothy Laboratories Ltd||2.84 %|
|Mahindra CIE Automotive Ltd||2.79 %|
|Minth Group Ltd||2.74 %|
|Asia - Emerging||74.27 %|
|Asia - Developed||25.73 %|
|Consumer Cyclical||27.13 %|
|Consumer Defensive||11.44 %|
|Financial Services||7.96 %|
|Basic materials||5.17 %|
Data provided by Morningstar.
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