Schroder Asian Income Maximiser. Final Short Report 1 January 2016 to 31 December 2016

Transcription

1 Schroder Asian Income Maximiser Final Short Report 1 January 2016 to 31 December 2016

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3 Schroder Asian Income Maximiser Review of Investment Activities From 31 December 2015 to 30 December 2016, the price of Z Accumulation units on a dealing price to dealing price basis, which reflects the reinvestment of the distribution paid to unitholders, rose 28.05%. The fund does not measure its performance against a benchmark because the options overlay strategy is expected to result in diverging performance according to market conditions. However, for comparison purposes, the MSCI All Country Pacific ex Japan Index generated a net return of 28.19% 1 in sterling terms over the same period. 1 Source: Thomson Reuters Datastream. The year 2016 got off to a volatile start but the Brexit vote and Donald Trump s victory in the US saw more supportive monetary policies from central banks drive gains in the region. The weakness of the pound enhanced sterling returns over the period. The fund s leading contributor was our underweight position in China, where the market underperformed the region on worries over the sustainability of its growth. Among the fund s top detractors was negative stock selection in Korea, where exposure to select materials names weighed on returns. The option strategy detracted from performance as equity markets rose sharply. This was expected as the overlay tends to underperform in rising markets but contributes positively when stock prices are falling. The fund s yield strategy is on track to pay out 7% in distributions for this year. Looking ahead, the uncertainty in the macroeconomic environment will offer opportunities and attractive entry points into Asian stock markets for long term investors. We maintain our bottom up investment approach and we continue to look for good companies where we can see a strong income case and potential for capital growth. In July 2016, Mike Hodgson replaced Dr Thomas See, with responsibility for the overlay strategy. Co-Fund Managers: Richard Sennitt Mike Hodgson

4 Fund Information Quarterly Interim Quarterly Final Accounting dates 31 March 30 June 30 September 31 December Revenue allocation dates 31 May 31 August 30 November 28 February For the year For the year Ongoing charges figure to to A Income units 1.70% 1.70% A Accumulation units 1.70% 1.70% L Income units 0.87% 0.87% L Accumulation units 0.87% 0.87% S Income units 0.57% 0.57% Z Income units 0.95% 0.95% Z Accumulation units 0.95% 0.95% Performance Record Net Asset Net Asset Value as at Value as at Net Asset Value Fund performance pence per unit pence per unit % change A Income units A Accumulation units L Income units L Accumulation units S Income units Z Income units Z Accumulation units months 1 year 5 years Schroder Asian Income Maximiser 1.51% 28.05% 64.30% MSCI All Country Pacific ex Japan Index 0.22% 28.19% 57.26% Fund Source: Z Accumulation units on a dealing price to dealing price basis to Index Source: Thomson Reuters Datastream, net return in sterling terms to

5 Comparative Tables A Income units Financial year to 31 December p per unit p per unit p per unit Change in net asset value Opening net asset value Return before operating charges (0.42) 5.23 Operating charges (0.84) (0.82) (0.86) Return after operating charges* (1.24) 4.37 Distributions (3.71) (3.82) Closing net asset value *after direct transaction costs of (0.04) (0.13) (0.08) Performance Return after charges (%) (2.48) 8.85 Other information Closing net asset value ( 000 s) 57,702 56,693 56,869 Closing number of units 108,868, ,018, ,871,883 Operating charges (%) Direct transaction costs (%)** Prices Highest dealing price (p) Lowest dealing price (p)

6 Comparative Tables (continued) A Accumulation units Financial year to 31 December p per unit p per unit p per unit Change in net asset value Opening net asset value Return before operating charges (0.58) 7.03 Operating charges (1.32) (1.20) (1.16) Return after operating charges* (1.78) 5.87 Distributions 1 (5.72) (5.39) (5.14) Retained distributions Closing net asset value *after direct transaction costs of (0.06) (0.18) (0.11) Performance Return after charges (%) (2.52) 9.07 Other information Closing net asset value ( 000 s) 12,536 10,690 16,331 Closing number of units 14,403,762 15,543,025 23,146,280 Operating charges (%) Direct transaction costs (%)** Prices Highest dealing price (p) Lowest dealing price (p)

7 Comparative Tables (continued) L Income units Financial year to 31 December p per unit p per unit p per unit Change in net asset value Opening net asset value Return before operating charges (0.49) 4.99 Operating charges (0.43) (0.41) (0.43) Return after operating charges* (0.90) 4.56 Distributions 1 (3.56) (3.59) (4.51) Closing net asset value *after direct transaction costs of (0.04) (0.12) (0.08) Performance Return after charges (%) (1.87) 9.47 Other information Closing net asset value ( 000 s) 27,524 9,391 3,445 Closing number of units 53,077,593 21,480,021 7,146,297 Operating charges (%) Direct transaction costs (%)** Prices Highest dealing price (p) Lowest dealing price (p)

8 Comparative Tables (continued) L Accumulation units Financial year to 31 December p per unit p per unit p per unit Change in net asset value Opening net asset value Return before operating charges (0.54) 5.18 Operating charges (0.51) (0.46) (0.45) Return after operating charges* (1.00) 4.73 Distributions 1 (4.34) (4.05) (4.66) Retained distributions Closing net asset value *after direct transaction costs of (0.05) (0.14) (0.08) Performance Return after charges (%) (1.89) 9.82 Other information Closing net asset value ( 000 s) 13,333 10,875 3,143 Closing number of units 20,171,205 20,955,517 5,942,255 Operating charges (%) Direct transaction costs (%)** Prices Highest dealing price (p) Lowest dealing price (p)

9 Comparative Tables (continued) S Income units Financial year to 31 December p per unit p per unit p per unit Change in net asset value Opening net asset value Return before operating charges (0.57) 6.70 Operating charges (0.30) (0.29) (0.28) Return after operating charges* (0.86) 6.42 Distributions 1 (3.89) (3.92) (3.84) Closing net asset value *after direct transaction costs of (0.04) (0.13) (0.08) Performance Return after charges (%) (1.64) Other information Closing net asset value ( 000 s) 6,738 5,758 4,155 Closing number of units 11,857,702 12,046,105 7,901,720 Operating charges (%) Direct transaction costs (%)** Prices Highest dealing price (p) Lowest dealing price (p) The unit class was launched on 31 January 2014.

10 Comparative Tables (continued) Z Income units Financial year to 31 December p per unit p per unit p per unit Change in net asset value Opening net asset value Return before operating charges (0.52) 5.28 Operating charges (0.49) (0.47) (0.49) Return after operating charges* (0.99) 4.79 Distributions (3.82) (3.92) Closing net asset value *after direct transaction costs of (0.04) (0.13) (0.08) Performance Return after charges (%) (1.93) 9.49 Other information Closing net asset value ( 000 s) 158, , ,924 Closing number of units 287,367, ,490, ,735,155 Operating charges (%) Direct transaction costs (%)** Prices Highest dealing price (p) Lowest dealing price (p)

11 Comparative Tables (continued) Z Accumulation units Financial year to 31 December p per unit p per unit p per unit Change in net asset value Opening net asset value Return before operating charges (0.72) 7.09 Operating charges (0.76) (0.69) (0.66) Return after operating charges* (1.41) 6.43 Distributions 1 (5.94) (5.55) (5.27) Retained distributions Closing net asset value *after direct transaction costs of (0.06) (0.19) (0.11) Performance Return after charges (%) (1.94) 9.73 Other information Closing net asset value ( 000 s) 22,558 21,371 25,399 Closing number of units 24,923,410 30,056,417 35,028,811 Operating charges (%) Direct transaction costs (%)** Prices Highest dealing price (p) Lowest dealing price (p) These figures have been rounded to 2 decimal places. ** Direct transaction costs have been stated after deducting the proportion of the amounts collected from dilution adjustments. The Operating charges are calculated on an ex-post basis and as such may differ from the Ongoing charges figure where the Ongoing charges figure has been annualised for a unit class that has not been in existence for a full year. For Accumulation unit classes, prior years figures have been updated in line with Investment Association circular, issued on 6 October Please remember that past performance is not a guide to future performance and it might not be repeated. The value of investments and the revenue from them may go down as well as up and investors may not get back the amount originally invested. Because of this, you are not certain to make a profit on your investments and you may lose money.

12 Portfolio Information % of net % of net assets assets Spread of as at as at investments Australia Bermuda Cayman Islands China Hong Kong India Italy Malaysia New Zealand Singapore South Korea % of net % of net assets assets as at as at Taiwan Thailand United Kingdom Australian Dollar Denominated Derivatives (0.60) (0.25) Hong Kong Dollar Denominated Derivatives (0.17) (0.14) Singapore Dollar Denominated Derivatives (0.09) (0.06) Sterling Denominated Derivatives (0.09) (0.18) Net other assets % of net assets as at Major holdings Taiwan Semiconductor Manufacturing 5.74 HSBC Holdings 3.52 BOC Hong Kong Holdings 3.00 Samsung Electronics Preference 2.92 China Petroleum & Chemical H 2.85 Hon Hai Precision Industry 2.64 China Mobile 2.63 HKT Trust & HKT 2.52 BHP Billiton 2.48 LG Chem Preference 2.34 % of net assets as at Taiwan Semiconductor Manufacturing 5.22 HSBC Holdings 3.33 Swire Pacific 3.04 HKT Trust & HKT 2.83 LG Chem Preference 2.81 China Mobile 2.77 China Petroleum & Chemical H 2.77 BOC Hong Kong Holdings 2.53 Hon Hai Precision Industry 2.11 National Australia Bank 2.10

13 Investment Objective & Policy The fund s investment objective is to provide income with potential for capital growth primarily through investment in equity and equity related securities of Asian (ex Japan) companies. In order to generate additional income, the Manager may selectively sell short dated call options over securities or portfolios of securities held by the fund, or indices, by setting individual target strike prices at which those securities may be sold in the future. The Manager is also permitted to sell put options on securities or portfolios of securities which are not held by the fund, or indices, at target prices that are pre-set below the current market level. The Manager may also, for the purpose of efficient management, use derivative instruments which replicate the performance of a basket of short dated call options or a combination of equity securities and short dated call options. Investment will primarily be in directly held transferable securities. The fund may also invest in collective investment schemes, cash, deposits, warrants, money market instruments and derivatives. In particular, the fund may buy or sell over the counter and exchange traded derivatives, and enter into total returns swaps. The fund will use derivative instruments for investment purposes as well as for efficient portfolio management. Further information The fund aims to deliver a target yield of 7% per year 1. The target yield of 7% is not guaranteed and could change according to prevailing market conditions. The Manager will notify unitholders if the target yield changes. 1 The yield is the sum of the four quarterly distributions that comprise the fund year, each calculated by dividing the quarterly distribution amount by the unit price at the start of that quarter.

14 Risk Profile Risk and reward indicator Lower risk Potentially lower reward Higher risk Potentially higher reward The risk category was calculated using historical performance data and may not be a reliable indicator of the fund s future risk profile. The fund is in this category because it can take higher risks in search of higher rewards and its price may rise and fall accordingly. The fund s risk category is not guaranteed to remain fixed and may change over time. A fund in the lowest category does not mean a risk free investment. Specific risks The fund invests in assets which are exposed to currencies other than sterling. Exchange rates may cause the value of overseas investments and the revenue from them to rise or fall. The fund invests in emerging markets and the Far East. This involves a high degree of risk and should be seen as long term in nature. The fund is index unconstrained and has the potential for greater volatility. The fund uses derivatives for specific investment purposes. The way in which derivatives are used will increase the revenue paid to investors and reduce volatility, but there is the potential that performance or capital value may be eroded. As a result of the expenses being charged wholly to capital, the distributable revenue of the fund may be higher, but the capital value of the fund may be eroded which may affect future performance. The target yield quoted is an estimate and is not guaranteed. It is quoted net of basic rate tax, however, higher rate tax payers should note that they may be liable for further deductions. For these reasons, the purchase of units should not normally be regarded as a short term investment.

15 Report & Accounts This document is a short report for Schroder Asian Income Maximiser for the year ended 31 December The long form Report & Accounts for the fund are available on our website or upon written request to Schroders, FREEPOST, RLTZ-CHSY-HBUT, PO Box 1102, Chelmsford, Essex CM99 2XX. Other Information The information contained in this report is designed to enable unitholders to make an informed judgement on the activities of the fund during the period it covers and the results of those activities at the end of the period. For more information about the activities and performance of the fund during this and previous periods, please contact the Manager. The Prospectus, the Key Investor Information Document and details of investment charges and costs are available on request or can be downloaded from our website Please remember that past performance is not a guide to future performance and it might not be repeated. The value of investments and the revenue from them may go down as well as up and investors may not get back the amount originally invested. Because of this, you are not certain to make a profit on your investments and you may lose money. For investors security, calls to Schroder Investor Services may be recorded. Manager: Schroder Unit Trusts Limited, 31 Gresham Street, London EC2V 7QA. Authorised and regulated by the Financial Conduct Authority. Investment Adviser: Schroder Investment Management Limited, 31 Gresham Street, London, EC2V 7QA. Authorised and regulated by the Financial Conduct Authority. Trustee: J.P. Morgan Europe Limited, Chaseside, Bournemouth BH7 7DA. Authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and Prudential Regulation Authority. Independent Auditors: PricewaterhouseCoopers LLP, Atria One, 144 Morrison Street, Edinburgh EH3 8EX. For further literature please contact Schroder Investor Services on or at investorservices@schroders.com, or visit our website at Issued in February 2017 by Schroder Unit Trusts Limited, 31 Gresham Street, London EC2V 7QA. Registered No: England. Authorised and regulated by the Financial Conduct Authority. w35659 MRAMAXF16

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