LONDON (Alliance News) - Aberdeen New Dawn Investment Trust PLC said Thursday its returns in the first half of its financial year were in line with its benchmark, after a strong period for Asian equities.
Aberdeen New Dawn reported a total return on a net asset value basis of 29.1% for the six months to October 31. This compares to a 30.4% return from its benchmark MSCI AC Asia Pacific ex Japan Index.
The trust's net asset value per share stood at 228.5 pence at October 31, up by 27% from 179.4p at April 30.
The share price of the trust rose by 23% to 196.3p from 156.0p over the same period. However, this left its discount to net asset value widened at 14% from 13%.
Shares in Aberdeen New Dawn Investment Trust were up 0.1% at 185.69p Thursday.
The trust said the positive return over the period were the product of a "buoyant period" in Asian equities, along with a benefit from depreciation in sterling.
A relative lack of exposure to Chinese equities held back the trust's performance against its benchmark index, said the trust. Aberdeen New Dawn said issues such as opaque ownership structures have held it back from investing in the mainland, but during the period it initiated a holding in the Aberdeen Global - China A Share fund to provide exposure to China via a diversified vehicle.
Overweight exposure to a Singaporean market which lagged the region's growth overall also harmed performance, the trust said, but holdings in Hong Kong were helpful. Trading in Hong Kong rebounded due to the approval of a trading link between its stock exchange and that in Shenzhen, in mainland China, said Aberdeen New Dawn.
"One key source of uncertainty for the export-oriented Asian economies will be the possibility of increased protectionism, as the incoming Trump administration appears to favour a more insular and inward looking stance on trade. The recent strength of the US dollar is another cause for worry, as it could potentially draw much-needed investment away from Asia and other emerging markets," said David Shearer, chairman of the trust.
"However the longer term prospects for Asia remain positive despite persisting concerns over China's rapid credit expansion and industrial overcapacity. Monetary policies within Asia continue to support economic growth, and recent political changes have promised economic revitalisation," added Shearer.
By Adam Clark; adamclark@alliancenews.com
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