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(Alliance News) - Schroder Asian Total Return Investment Co PLC on Friday said it comfortably outperformed its benchmark in the first half of the year thanks to "strong stock selection".
The company invests in equities and equity-related securities of companies trading in the Asia Pacific region, excluding Japan. It reported a 6.1% net asset value total return for the six months ended June 30. In comparison, its benchmark, the MSCI AC Asia Pacific ex Japan index, returned just 0.7%.
"Strong stock selection has contributed significantly to this performance with quality stocks proving resilient, whilst some areas of focus in the portfolio, such as the internet and technology sectors, have proved to be beneficiaries of the business impact of the pandemic," said CHair Sarah MacAulay.
The company's NAV per share increased to 380.43 pence on June 30 from 365.57p at the end of 2019 and from 363.21p the year before.
MacAulay said: "The portfolio managers have become more cautious although trading conditions are unlikely to be as volatile as earlier in the year. Valuations for some specific sectors of the market now look steep following very strong performance, although there are still quality stocks to be found at reasonable value. Markets may have to digest successive downward revisions in corporate earnings as the effects of Covid-19 are reflected in company profit forecasts.
"However this environment provides ample opportunity for stock pickers as benchmark moves belie huge earnings dispersion both within and between sectors. In addition, the portfolio managers' focus on long-term fundamental growth companies in Asia with strong balance sheets and sound corporate governance should provide portfolio resilience, with the added benefit of being able to utilise capital protection against downside risk."
Shares in Schroder Asian Total Return were up 0.4% at 405.75p in London on Friday afternoon.
By Anna Farley; annafarley@alliancenews.com
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