Schroder Asian Growth Fund

Transcription

1 Schroder Asian Growth Fund Semi-Annual Report & Financial Statements June 2017

2 Constituted under a Trust Deed in the Republic of Singapore on 4 April 1991 Manager Schroder Investment Management (Singapore) Ltd 138 Market Street #23-01 CapitaGreen Singapore Company Registration No H Trustee HSBC Institutional Trust Services (Singapore) Limited 21 Collyer Quay #13-02 HSBC Building Singapore Company Registration No R Audirs PricewaterhouseCoopers LLP 8 Cross Street #17-00 PWC Building Singapore Solicirs the Manager Allen & Gledhill LLP One Marina Boulevard #28-00 Singapore Solicirs the Trustee Shook Lin & Bok LLP 1 Robinson Road #18-00 AIA Tower Singapore Further Information Schroders is a Foreign Account Tax Compliance Act ( FATCA ) compliant organisation. Please find the FATCA classification of this Fund and its Global Intermediary Identification Number ( GIIN ) below. FATCA entity classification: Nonreporting IGA FFI / Sponsored Investment Entity GIIN: WM9S4Z SF.702 1

3 Constituted under a Trust Deed in the Republic of Singapore on 4 April 1991 Commentary In recent months much of the initial excitement about imminent US tax cuts, a new infrastructure investment cycle, and a broader Trump reflation trade have faded, following missteps from the new administration and greater appreciation of the legislative challenges involved with such radical measures. The US Federal Reserve has pushed ahead raise short term interest rates, but US bond yields and the US Dollar have retraced much of their post-election moves reflecting this more measured outlook for US growth and inflation. However, despite this disappointment, equity markets have remained encouraged by continued signs of cyclical strength from the Chinese economy, where growth has accelerated in the last 12 months in response a prolonged period of strong credit growth, fiscal stimulus and infrastructure spending. This latest bout of stimulus in for the Chinese economy will continue underpin growth in the next few quarters and smooth the political path the next National Congress at the end of this year; however it is not without risks. Aggregate gearing levels in the economy continue rise rapidly, with apparently declining returns on the incremental debt, while loose monetary policy has also fuelled unintended bubbles in areas like the property and local bond markets. Given the strength of the rebound in the more cyclical parts of the Chinese economy, local authorities are now tightening policy at the margin. Higher interbank interest rates are pushing up yields in the corporate bond market, while administrative restrictions have increased on the frothier parts of the local property market and there is increased scrutiny of the insurance and shadow banking secrs which have been at the forefront of the growth in Total Social Finance in China in the last 2-3 years. These tighter monetary conditions are already having an impact on the spot commodity markets, which are so sensitive the delta of Chinese growth, and are likely drain some of the momentum from the broader economy in coming quarters. 2

4 Constituted under a Trust Deed in the Republic of Singapore on 4 April 1991 Given this mixed medium term backdrop and aggregate valuations for markets that are at above average levels, we continue focus on botm-up sck selection and picking longer term structural winners, rather than chasing the shorter term momentum in the more cyclical parts of the market. Rapidly shifting business models and trade patterns mean that it is more important than ever look forward at the growth opportunities of morrow rather than remain anchored in day s incumbent market heavyweights. We continue see attractive long term growth opportunities in the technology secrs both hardware and e-commerce and some of the more domestically-focused service secrs and financials across the region that are benefitting from rising income levels and evolving consumption patterns. Although aggregate valuations have risen in recent months as markets have rallied, multiples are not yet at worrying levels and we continue see long term opportunities in our favoured areas of the markets. June

5 Statement of Total Return For the financial period ended 30 June 2017 (Unaudited) Income Dividends: 30 Jun Jun 2016 $ $ Singapore 136, ,155 Foreign 8,217,377 7,424,130 Interest on deposits with banks Sundry income ,354,208 7,565,545 Less : Expenses Management fees 4,161,387 2,782,511 Trustee fees 118,574 81,836 Valuation fees 92,613 61,966 Cusdian fees 109,330 81,668 Registration fees 366, ,387 Audit fees 10,410 9,453 Transaction costs 299, ,152 Others 370,589 94,796 5,528,699 3,732,769 Net income 2,825,509 3,832,776 Net gains or losses on value of investments and financial derivatives Net gains/(losses) on investments 153,843,466 (13,643,674) Net losses on spot foreign exchange contracts (294,268) (191,940) Net foreign exchange gains/ (losses) 52,948 (217,056) 153,602,146 (14,052,670) Total return/(deficit) for the period before income tax 156,427,655 (10,219,894) Less : Income tax (849,056) (557,447) Total return/(deficit) for the period 155,578,599 (10,777,341) 4

6 Statement of Financial Position As at 30 June 2017 (Unaudited) 30 Jun Dec 2016 $ $ ASSETS Portfolio of investments 835,696, ,387,288 Bank balances 8,358,706 10,033,365 Receivables 14,203,122 4,033,201 Financial derivatives Total assets 858,258, ,454,166 LIABILITIES Purchases awaiting settlement - 1,289,455 Payables 9,521,282 15,657,024 Financial derivatives Total liabilities 9,521,401 16,946,479 EQUITY Net assets attributable unitholders 848,737, ,507,687 5

7 Statement of Movements of Unitholders Funds For the financial period ended 30 June 2017 (Unaudited) 30 Jun Dec 2016 $ $ Net assets attributable unitholders at the beginning of the financial period/year 633,507, ,566,183 Operations Change in net assets attributable unitholders resulting from operations 155,578,599 50,587,086 Unitholders contributions/ (withdrawals) Creation of units 174,282, ,532,124 Cancellation of units (105,070,474) (129,825,725) Change in net assets attributable unitholders resulting from net creation and cancellation of units 69,212,150 86,706,399 Distributions (9,561,416) (24,351,981) Total increase in net assets attributable unitholders 215,229, ,941,504 Net assets attributable unitholders at the end of the financial period/year 848,737, ,507,687 6

8 Statement of Portfolio As at 30 June 2017 (Unaudited) Primary Percentage of tal net assets attributable Holdings Fair value unitholders at at at 30 Jun Jun Jun 2017 By geography $ % Quoted Equities CHINA Alibaba Group Hldg Ltd ADR 259,582 50,358, China Lodging Group Ltd ADS 178,366 19,813, China Mobile Ltd 782,500 11,434, China Pacific Insurance Group Co Ltd H Shares 3,909,800 21,997, China Petroleum & Chemical Corp H Shares 11,188,000 12,017, China Resources Land Ltd 2,902,000 11,644, China Taiping Insurance Hldg Co Ltd 3,201,342 11,168, Hangzhou Hikvision Digital Technology Co Ltd A Shares warrants expiring 7 May ,658,457 17,436, Han s Laser Technology Ind Group Co Ltd A Shares warrants expiring 22 Jun ,593,098 11,205, Hollysys Aumation Technologies Ltd 448,912 10,266, Hutchison China MediTech Ltd ADR 502,324 16,121, Midea Group Co Ltd A Shares 1,077,233 9,414,

9 Statement of Portfolio As at 30 June 2017 (Unaudited) Primary (continued) Percentage of tal net assets attributable Holdings Fair value unitholders at at at 30 Jun Jun Jun 2017 By geography $ % Quoted Equities CHINA (continued) New Oriental Education & Technology Group Inc ADR 209,308 20,314, Springland Intl Hldg Ltd 13,461,000 3,656, Tencent Hldg Ltd 1,098,300 54,084, Vipshop Hldg Ltd ADR 465,078 6,755, WuXi Biologics Cayman Inc 1,965,000 10,171, ,861, HONG KONG AIA Group Ltd 3,372,600 33,935, BOC Hong Kong (Hldg) Ltd 2,563,500 16,887, Chow Sang Sang Hldg Intl Ltd 2,471,000 7,940, Galaxy Entertainment Group Ltd 914,000 7,641, HKT Trust and HKT Ltd Stapled Shares 3,524,000 6,364, Hongkong Land Hldg Ltd 1,222,900 12,392, Jardine Strategic Hldg Ltd 318,000 18,253, Kerry Properties Ltd 2,525,000 11,801, Pacific Textiles Hldg Ltd 4,713,000 7,489, Swire Properties Ltd 3,438,050 15,614, Techtronic Ind Co Ltd 3,216,500 20,366, ,686,

10 Statement of Portfolio As at 30 June 2017 (Unaudited) Primary (continued) Percentage of tal net assets attributable Holdings Fair value unitholders at at at 30 Jun Jun Jun 2017 By geography $ % Quoted Equities INDIA Apollo Hospitals Enterprise Ltd 410,990 11,158, Arvind Ltd 836,169 6,409, Cummins India Ltd 306,718 6,009, HDFC Bank Ltd 942,442 33,423, IndusInd Bank Ltd 316,126 9,959, The Phoenix Mills Ltd 1,254,325 12,024, Zee Entertainment Enterprises Ltd 995,440 10,418, ,402, INDONESIA Tempo Scan Pacific Tbk PT 7,541,000 1,565, PHILIPPINES Ayala Land Inc 9,697,300 10,517, RFM Corp 70,438,600 8,552, ,070, SINGAPORE Jardine Cycle & Carriage Ltd 208,000 9,224, Oversea-Chinese Banking Corp Ltd 755,900 8,156, ,380,

11 Statement of Portfolio As at 30 June 2017 (Unaudited) Primary (continued) Percentage of tal net assets attributable Holdings Fair value unitholders at at at 30 Jun Jun Jun 2017 By geography $ % Quoted Equities SOUTH KOREA LG Chem Ltd 31,389 10,991, Mando Corp 40,068 12,415, NAVER Corp 8,513 8,584, NCSoft Corp 22,284 10,176, Samsung Electronics Co Ltd 22,467 64,265, WONIK IPS Co Ltd 268,357 9,575, ,009, SRI LANKA John Keells Hldg PLC 7,889,814 12,649, TAIWAN Delta Electronics Inc 885,000 6,669, Hon Hai Precision Ind Co Ltd 3,903,820 20,672, Largan Preciszion Co Ltd 53,000 11,634, Merida Ind Co Ltd 1,349,850 9,958, Taiwan Semiconducr Manufacturing Co Ltd 6,017,309 56,785, ,720,

12 Statement of Portfolio As at 30 June 2017 (Unaudited) Primary (continued) Percentage of tal net assets attributable Holdings Fair value unitholders at at at 30 Jun Jun Jun 2017 By geography $ % Quoted Equities THAILAND AEON Thana Sinsap (Thailand) PCL NVDR 1,679,700 7,216, Kasikornbank PCL NVDR 1,259,300 10,131, ,348, Portfolio of investments 835,696, Other net assets 13,040, Net assets attributable unitholders 848,737, Legend : ADR : American Deposiry Receipts ADS : American Deposiry Share NVDR : Non-Voting Deposiry Receipts 11

13 Statement of Portfolio As at 30 June 2017 (Unaudited) Primary (continued) Percentage Percentage of tal net of tal net assets assets attributable attributable unitholders unitholders at at 30 Jun Dec 2016 By geography (summary) % % Quoted China Hong Kong India Indonesia Philippines Singapore South Korea Sri Lanka Taiwan Thailand Portfolio of investments Other net assets/(liabilities) 1.54 (0.45) Net assets attributable unitholders

14 Statement of Portfolio As at 30 June 2017 (Unaudited) Secondary Percentage Percentage of tal net of tal net assets assets attributable attributable Fair value unitholders unitholders at at at 30 Jun Jun Dec 2016 By industry $ % % Aumobiles & Components 12,415, Bank 78,557, Chemicals/ Petrochemicals 10,991, Commercial Services 20,314, Consumer Durables 33,272, Diversified Operations 30,902, Electronics 120,678, Finance 7,216, Food & Beverage 8,552, Health Care/ Pharmaceuticals 39,017, Hotel 27,454, Industrial Machinery 47,847, Insurance 67,101, Internet Services 58,943, IT Services Media 64,502, Oil & Gas 12,017, Real Estate 73,995, Retail 27,577, Semiconducr 66,360, Software 10,176, Telecommunications 17,798, Portfolio of investments 835,696, Other net assets/ (liabilities) 13,040, (0.45) Net assets attributable unitholders 848,737,

15 Units in Issue For the financial period ended 30 June 2017 (Unaudited) S$ Class 30 Jun Dec 2016 Units Units At the beginning of the financial period/year 214,440, ,811,282 Created 51,193,990 78,582,209 Cancelled (28,068,809) (38,952,540) At the end of the financial period/year 237,566, ,440,951 $ $ Net assets attributable unitholders 800,994, ,284,938 Net assets attributable unitholders per unit US$ Class 30 Jun Dec 2016 Units Units At the beginning of the financial period/year 11,031,348 15,804,744 Created 4,405,303 2,086,052 Cancelled (5,235,155) (6,859,448) At the end of the financial period/year 10,201,496 11,031,348 US$ US$ Net assets attributable unitholders 34,676,118 29,229,149 Net assets attributable unitholders per unit

16 Units in Issue For the financial period ended 30 June 2017 (Unaudited) The Fund currently offers 2 Classes of units, namely S$ Class units and US$ Class units. Both Classes of units constitute the Fund and have different features. The key difference between the Classes is the currency of denomination applicable each Class. The US$ Class is structured such that all or substantially all its assets are invested in the S$ Class, and is subject foreign exchange risk against the Fund s functional currency. Net assets attributable unitholders ( NAV ) is apportioned between S$ Class and US$ Class units based on the proportion of NAV of each Class, which is determined by computing the equivalent number of units of S$ Class and US$ Class units in issue. Any expense, income and/or gain which is attributable a particular Class shall be deducted from or added the net assets attributable that Class. 15

17 Financial Ratios For the financial period ended 30 June 2017 (Unaudited) 30 Jun Jun 2016 Expense ratio % 1.36% Turnover ratio % 18.01% 1 The expense ratio has been computed based on the guidelines laid down by the Investment Management Association of Singapore ( IMAS ). The calculation of the expense ratio was based on tal operating expenses divided by the average net asset value for the year. The tal operating expenses do not include brokerage and other transaction costs, performance fee, interest expense, distribution paid out unitholders, foreign exchange gains/losses, front or back end loads arising from the purchase or sale of other funds and tax deducted at source or arising out of income received. The Fund does not pay any performance fee. The respective values used in the calculation of the expense ratio are disclosed below. The average net asset value is based on the daily balances. Expense ratio calculations 30 Jun Jun 2016 $ $ Total operating expenses 9,389,743 6,864,308 Average net asset value 690,940, ,813,332 2 The portfolio turnover ratio is calculated in accordance with the formula stated in the Code on Collective Investment Schemes. The calculation of the portfolio turnover ratio was based on the lower value of purchases or sales of the underlying investments divided by the average daily net asset value. Turnover ratio calculations 30 Jun Jun 2016 $ $ Lower of purchases or sales 80,817,938 (sales) 89,755,402 (purchases) Average net asset value 747,221, ,251,036 16

18 Report Unitholders 30 June 2017 The following is a report on the (the Fund ): 1. Top 10 holdings of the Fund as at 30 June 2017: Percentage of tal net assets attributable Fair value unitholders $ % Samsung Electronics Co Ltd 64,265, Taiwan Semiconducr Manufacturing Co Ltd 56,785, Tencent Hldg Ltd 54,084, Alibaba Group Hldg Ltd ADR 50,358, AIA Group Ltd 33,935, HDFC Bank Ltd 33,423, China Pacific Insurance Group Co Ltd H Shares 21,997, Hon Hai Precision Ind Co Ltd 20,672, Techtronic Ind Co Ltd 20,366, New Oriental Education & Technology Group Inc ADR 20,314,

19 Report Unitholders 30 June 2017 Top 10 holdings of the Fund as at 30 June 2016: Percentage of tal net assets attributable Fair value unitholders $ % Taiwan Semiconducr Manufacturing Co Ltd 39,250, Tencent Hldg Ltd 29,600, Samsung Electronics Co Ltd 25,503, AIA Group Ltd 25,041, HDFC Bank Ltd 20,828, China Mobile Ltd 17,832, Alibaba Group Hldg Ltd ADR 17,637, Techtronic Ind Co Ltd 16,015, New Oriental Education & Technology Group Inc ADR 12,682, China Lodging Group Ltd ADS 10,847, The Fund was not invested in other unit trusts, mutual funds or collective investment schemes as at 30 June For the full composition of investments of the Fund as at 30 June 2017, refer the Statement of Portfolio on pages

20 Report Unitholders 30 June The Fund has the following exposure financial derivatives as at 30 June 2017: Percentage of tal net assets attributable Fair value unitholders $ % Contracts: Spot foreign exchange (89) (*) * Less than 0.01 The net loss on financial derivatives realised during the period 1 January June 2017 amounted S$294,179. The net loss on outstanding financial derivatives marked market as at 30 June 2017 amounted S$ The Fund did not have any borrowings as at 30 June The amount of subscriptions and redemptions during the period 1 January June 2017 were as follows: Subscriptions 174,282,624 Redemptions 105,070, Expense Ratio $ 1 July June % 1 July June % 6. Turnover of Portfolio 1 January June % 1 January June % 19

21 Report Unitholders 30 June Soft dollar commissions/arrangements: In the management of the Fund, the Manager may accept soft dollar commissions from, or enter in soft dollar arrangements with, sckbrokers who execute trades on behalf of the Fund and the soft dollars received are restricted the following kinds of services: (i) research, analysis or price information; (ii) performance measurement; (iii) portfolio valuations; and (iv) administration services. The Manager may not receive or enter in soft dollar commissions or arrangements unless (a) such soft dollar commissions or arrangements shall reasonably assist the Manager in their management of the Fund, (b) best execution is carried out for the transactions, and (c) that no unnecessary trades are entered in in order qualify for such soft dollar commissions or arrangements. The Manager shall not receive goods and services such as travel, accommodation and entertainment. 8. Related Party Transactions The Manager of the Fund is Schroder Investment Management (Singapore) Ltd. The Registrar for the Fund is Schroder Investment Management (Luxembourg) SA, a related party of the Manager. The Trustee is HSBC Institutional Trust Services (Singapore) Limited, a subsidiary of the HSBC Group. The management fees paid the Manager and registration fees paid the Registrar; trustee fees, valuation fees and cusdian fees charged by, and interest earned on deposits with, the HSBC Group are shown in the Statement of Total Return. As at reporting date, the Fund maintained with the HSBC Group, the following bank balances: 30 Jun Dec 2016 $ $ Current accounts 8,358,706 10,033,365 20

22 Report Unitholders 30 June Performance of Fund for periods ended 30 June mths 6 mths 1 yr 3 yrs* 5 yrs* 10 yrs* Since Launch* # S$ Class 10.4% 23.7% 37.2% 12.0% 12.9% 6.2% 9.2% Benchmark** 6.7% 17.0% 29.6% 8.5% 9.7% 3.4% 6.3% US$ Class 12.0% 29.8% 34.1% 8.3% 11.0% 7.4% 11.6% Benchmark** 8.3% 22.8% 26.7% 5.0% 7.9% 4.5% 9.7% * Returns of more than 1 year are annualised # Since launch figures from 8 May 1991 (S$ Class) and 30 April 2004 (US$ Class) ** Benchmark: The benchmark of the Fund has been changed from the MSCI AC Far East ex Japan Index (Gross Dividend Reinvested) the MSCI AC Far East ex Japan Index (Net Dividend Reinvested) with effect from 1 March On 1 March 2016, the MSCI AC Asia ex Japan Index (Net Dividend Reinvested) replaced the MSCI AC Far East ex Japan Index (Net Dividend Reinvested). Source: Schroders, class currency, bid bid, net income reinvested. 21

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