Schroder. Asian Income Fund. Interim Report and Accounts July 2017

Transcription

1 Schroder Asian Income Fund Interim Report and Accounts July 2017

2 Contents Schroder Asian Income Fund Fund Information Investment objective and policy Financial highlights Fund information Ongoing charges figure Total purchases and sales Review of Investment Activities Risk Profile Risk and reward indicator Specific risks Net Asset Value and Comparative Tables Unit price range Net revenue Net asset value Fund performance Portfolio Statement Summary of Portfolio Transactions Largest purchases Largest sales Statement of the Manager s Responsibilities Statement of Total Return (unaudited) Statement of Change in Net Assets Attributable to Unitholders (unaudited) Balance Sheet (unaudited) Notes to the Accounts (unaudited) Basis of preparation Accounting policies Distribution Table (unaudited) Interim distribution for the six months ended 15 July Corporate unitholders Equalisation General Information Authorisation Other information Collectively these comprise the Authorised Fund Manager s report.

3 Fund Information Investment objective and policy The fund aims to provide income and capital growth over the long term by investing in equity and equity related securities of Asia Pacific companies excluding Japan but including Australia and New Zealand. The fund invests at least 80% of its assets in equity and equity related securities of Asia Pacific companies, excluding Japan but including Australia and New Zealand, which offer dividend payments. The fund may also invest in collective investment schemes, fixed income securities, warrants and money market instruments, and hold cash. The fund may use derivatives with the aim of reducing risk or managing the fund more efficiently. With effect from 5 April 2017 the fund s Investment objective and policy changed, previously it was: The fund s investment objective is to provide a growing income and capital growth for investors over the long term primarily through investment in equity and equity related securities of Asian companies which offer attractive yields and growing dividend payments. The emphasis of the fund will be investment in the Asia Pacific excluding Japan (including Australia and New Zealand) region. Investment will be in directly held transferable securities. The fund may also invest in collective investment schemes, warrants and money market instruments. Financial highlights Selling price % change A Income units p p 4.54 A Accumulation units p p 6.57 L Income units 68.90p 65.63p 4.98 L Accumulation units 78.83p 73.66p 7.02 S Income units 74.56p 70.91p 5.15 Z Income units 74.03p 70.55p 4.93 Z Accumulation units 94.90p 88.71p Final distribution per Z Income unit p p 3

4 Fund Information (continued) Fund information Launch date 19 February 1990 Launch price 50.00p per A Income unit 50.00p per A Accumulation unit Launch date 11 May 2011 Launch price 50.00p per Z Income unit 50.00p per Z Accumulation unit Launch date 1 October 2013 Launch price 50.00p per L Income unit 50.00p per L Accumulation unit Launch date 4 September 2015 Launch price 50.00p per S Income unit Interim Final Accounting dates 15 July 15 January Revenue allocation dates 15 September 15 March Ongoing charges figure For the period For the year to to A Income units 1.68% % A Accumulation units 1.68% % L Income units 0.85% % L Accumulation units 0.85% % S Income units 0.55% % Z Income units 0.93% % Z Accumulation units 0.93% % 1 The Ongoing charges figure is annualised based on the fees incurred during the accounting period. Total purchases and sales For the period For the year to to s 000 s Total purchases 201, ,694 Total sales 134, ,787 4

5 Review of Investment Activities From 13 January 2017 to 14 July 2017, the price of Z Accumulation units on a selling price to selling price basis rose 6.98%. In comparison, the MSCI All Country Pacific ex Japan Index generated a net return of 9.48% 1 in sterling terms. 1 Source: Thomson Reuters Datastream. Solid data for the US, Eurozone and China economies spurred strong buying interest for global stock markets during the period. In Asia, a pickup in inflationary data for China suggested sustained growth momentum for the world s second largest economy and buoyed sentiment for the broader region. The fund s leading contributor over the period was our strong stock selection in Australia as our holdings in select resources and financials outperformed the broader market. Our positive stock selection in Taiwan also contributed, driven by the fund s holdings in the island s quality technology names. Meanwhile, the fund s top detractor was negative stock selection in China, where our lack of Chinese internet holdings in names that either don t pay a dividend, or a de minimis one, hurt performance. Our underweight position also detracted from value. Another top detractor was our underweight position in Korea, where the market gained strongly on positive export data and foreign investor inflows. Looking ahead, the long term structural trends in Asia remain a powerful backdrop but investing in the right companies is key. We maintain a strict bottom-up investment view and continue to look for good companies where we can see a strong income case and potential for capital growth. Fund Manager: Richard Sennitt Joined Schroders in 1993 Investment career commenced in 1993 As fund manager for Pacific Equity and Global Small Cap Equity accounts, Richard is co-manager of Schroder Asian Income Maximiser and manager of Schroder Asian Income Fund Associate member of the UK Society of Investment Professionals (UKSIP). Member of the CFA Institute BA, Oxford University 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. 5

6 Risk Profile Risk and reward indicator 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 less developed markets which are generally less well regulated than the UK. They may be less liquid and may have less reliable custody arrangements. 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. 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. For these reasons, the purchase of units should not normally be regarded as a short term investment. 6

7 Net Asset Value and Comparative Tables Financial year to 15 January A Income units A Accumulation units Unit price range Highest Lowest Highest Lowest buying selling buying selling p p p p Financial period to 15 July Financial year to 15 January L Income units L Accumulation units Highest Lowest Highest Lowest buying selling buying selling p p p p Financial period to 15 July Financial year to 15 January S Income units Z Income units Highest Lowest Highest Lowest buying selling buying selling p p p p Financial period to 15 July Financial year to 15 January Z Accumulation units Highest Lowest buying selling p p Financial period to 15 July

8 Net Asset Value and Comparative Tables (continued) Net revenue A Income units A Accumulation units Financial year to 15 January pence per unit pence per unit Financial period to 15 July L Income units L Accumulation units Financial year to 15 January pence per unit pence per unit Financial period to 15 July S Income units Z Income units Financial year to 15 January pence per unit pence per unit Financial period to 15 July Z Accumulation units Financial year to 15 January pence per unit Financial period to 15 July

9 Net Asset Value and Comparative Tables (continued) Net asset value Net asset Net asset value value per unit Number of As at 15 January 000 s p units in issue 2015 A Income units 61, ,564,103 A Accumulation units 137, ,354,280 L Income units 12, ,813,612 L Accumulation units 45, ,843,863 Z Income units 174, ,111,662 Z Accumulation units 132, ,079, A Income units 29, ,194,711 A Accumulation units 64, ,527,651 L Income units 31, ,041,366 L Accumulation units 141, ,746,237 S Income units ,365,839 Z Income units 287, ,807,912 Z Accumulation units 137, ,513, A Income units 20, ,747,707 A Accumulation units 64, ,081,446 L Income units 200, ,483,585 L Accumulation units 252, ,870,221 S Income units ,177,709 Z Income units 314, ,578,968 Z Accumulation units 194, ,709, at 15 July A Income units 18, ,884,641 A Accumulation units 64, ,315,669 L Income units 236, ,113,406 L Accumulation units 256, ,845,424 S Income units 1, ,040,627 Z Income units 337, ,159,024 Z Accumulation units 239, ,202,974 9

10 Net Asset Value and Comparative Tables (continued) Fund performance Net asset Net asset value per unit value per unit p p as at as at % change A Income units A Accumulation units L Income units L Accumulation units S Income units Z Income units Z Accumulation units 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. 10

11 Portfolio Statement Asia Hong Kong/China 21.92% ( %) Holding at Market Value % of net s assets BOC Hong Kong Holdings 6,983,000 25, China Mobile 3,043,500 24, China Petroleum & Chemical H 50,792,000 29, Hangzhou Hikvision Digital Technology 1,055,034 3, Hangzhou Hikvision Digital Technology Warrants (UBS) ,512,350 11, HKT Trust & HKT 24,450,000 24, Hopewell Holdings 2,422,000 7, Industrial & Commercial Bank of China 41,650,000 21, Link REIT 2,752,000 16, Midea Group 1,242,315 5, Midea Group Warrants (UBS) ,750,355 17, PetroChina 26,296,000 12, Sun Hung Kai Properties 2,058,000 24, Swire Pacific A 2,236,000 16, Swire Properties 4,738,200 12, , India 0.00% ( %) Singapore 11.29% ( %) CapitaLand Mall Trust 5,207,800 5, ComfortDelGro 9,632,400 12, Fortune Real Estate Investment Trust 18,332,000 16, Mapletree Commercial Trust 15,373,363 13, Mapletree Industrial Trust 12,554,100 12, Oversea-Chinese Banking 2,970,500 18, SATS 1,516,400 4, Singapore Telecommunications 5,049,100 10, United Overseas Bank 1,162,500 15, Venture 2,895,500 20, ,

12 Portfolio Statement (continued) Holding at Market Value % of net s assets South Korea 9.29% ( %) Hanon Systems 369,043 2, Hyundai Motor Preference 212,276 15, LG Chem Preference 193,631 28, Samsung Electronics Preference 33,673 44, SK Telecom 87,768 15, , Taiwan 17.58% ( %) Asustek Computer 2,726,000 19, Delta Electronics 3,177,361 12, Far EasTone Telecommunications 8,626,000 15, Hon Hai Precision Industry 12,200,435 35, Largan Precision 79,000 10, Mega Financial Holding 29,750,613 19, Novatek Microelectronics 3,916,000 11, Taiwan Mobile 4,907,400 13, Taiwan Semiconductor Manufacturing 12,067,333 64, , Thailand 5.05% ( %) Bangkok Bank 1 2,583,900 11, Bangkok Bank Non-Voting Depositary Receipts 3,212,300 13, Glow Energy 1 2,882,400 5, Intouch Holdings 1 1,002,600 1, Intouch Holdings Non-Voting Depositary Receipts 11,768,300 15, Land & Houses Non-Voting Depositary Receipts 48,575,400 10, , Australasia Australia 17.19% ( %) Amcor 1,479,832 14, Brambles 2,153,696 12, Computershare 748,747 6,

13 Portfolio Statement (continued) Holding at Market Value % of net s assets Australia (continued) Iluka Resources 2,496,463 13, Incitec Pivot 5,787,205 12, Mirvac Group 9,710,837 12, National Australia Bank 1,432,535 25, Orica 1,724,130 21, Suncorp Group 1,917,915 17, Telstra 4,522,594 11, Transurban Group 2,942,972 20, Westpac Banking 869,754 16, Woolworths 992,019 15, , New Zealand 1.51% ( %) Fletcher Building 4,022,738 17, , Central, North and South America Bermuda 1.77% ( %) Kerry Properties 5,204,000 13, Li & Fung 24,232,000 6, , Cayman Islands 5.09% ( %) CK Hutchison Holdings 1,199,952 11, Pacific Textiles Holdings 10,457,000 9, Sands China 6,924,800 24, Shenzhou International Group Holdings 2,551,000 13, , Europe Italy 0.00% ( %) United Kingdom 7.20% ( %) BHP Billiton 1,868,434 24,

14 Portfolio Statement (continued) Holding at Market Value % of net s assets United Kingdom (continued) HSBC Holdings 6,057,600 44, Standard Chartered 1,761,300 14, , Portfolio of investments 1,130, Net other assets 24, Net assets attributable to unitholders 1,155, Unless otherwise stated the above securities are ordinary shares or common stock and admitted to official stock exchange listings. 1 Foreign registered. 14

15 Summary of Portfolio Transactions Largest purchases Largest sales Cost For the six months ended 15 July s Industrial & Commercial Bank of China 20,835 Oversea-Chinese Banking 16,426 PetroChina 16,136 Link REIT 15,469 Midea Group Warrants (UBS) ,874 Novatek Microelectronics 12,267 Hangzhou Hikvision Digital Technology Warrants (UBS) ,703 Fletcher Building 7,108 Asustek Computer 6,677 Midea Group 5,759 Proceeds For the six months ended 15 July s Midea Group Warrants (UBS) ,874 DBS Group Holdings 12,523 PRADA 11,931 Belle International Holdings 10,752 Woodside Petroleum 9,950 BOC Hong Kong Holdings 9,164 Hangzhou Hikvision Digital Technology Warrants (UBS) ,703 ANTA Sports Products 8,034 Largan Precision 7,861 PCCW 7,811 15

16 Statement of the Manager s Responsibilities The Financial Conduct Authority s Collective Investment Schemes sourcebook (COLL) requires the Manager to prepare accounts for each annual and half yearly accounting period, in accordance with United Kingdom Generally Accepted Accounting Practice, which give a true and fair view of the financial position of the fund and of its net revenue and the net capital gains on the property of the fund for the period. In preparing the accounts the Manager is required to: select suitable accounting policies and then apply them consistently; comply with the disclosure requirements of the Statement of Recommended Practice (SORP) for UK Authorised Funds issued by the Investment Management Association (IMA (now the Investment Association (IA))) in May 2014; follow generally accepted accounting principles and applicable accounting standards; prepare the accounts on the basis that the fund will continue in operation unless it is inappropriate to do so; keep proper accounting records which enable it to demonstrate that the accounts as prepared comply with the above requirements; make judgements and estimates that are prudent and reasonable. The Manager is responsible for the management of the fund in accordance with its Trust Deed, the Prospectus and the COLL and for taking reasonable steps for the prevention and detection of fraud, error and non-compliance with law or regulations. The Manager s report and accounts for the period ended 15 July 2017 were signed on 30 August 2017 on behalf of the Manager by: J.A. Walker-Hazell Directors J.M. Cardew 16

17 Statement of Total Return (unaudited) For the six months ended 15 July s 000 s 000 s 000 s Income Net capital gains 46, ,101 Revenue 25,895 18,637 Expenses (5,231) (3,855) Net revenue before taxation 20,664 14,782 Taxation (1,317) (645) Net revenue after taxation 19,347 14,137 Total return before distributions 65, ,238 Distributions (23,989) (17,637) Change in net assets attributable to unitholders from investment activities 41, ,601 Statement of Change in Net Assets Attributable to Unitholders (unaudited) For the six months ended 15 July s 000 s 000 s 000 s Opening net assets attributable to unitholders 1,048, ,832 Amounts receivable on issue of units 120,010 88,044 Amounts payable on cancellation of units (67,721) (50,310) 52,289 37,734 Dilution adjustment 1, Change in net assets attributable to unitholders from investment activities 41, ,601 Retained distributions on Accumulation units 11,722 8,924 Unclaimed distributions 11 0 Closing net assets attributable to unitholders 1,155, ,553 1 The Opening net assets attributable to unitholders for the current period do not equal the Closing net assets attributable to unitholders for the comparative period as they are not consecutive periods. 17

18 Balance Sheet (unaudited) As at 15 July s 000 s Assets Investments 1,130,840 1,018,366 Current assets Debtors 12,807 63,133 Cash and bank balances 26,915 32,897 Total assets 1,170,562 1,114,396 Liabilities Creditors Distribution payable (12,696) (10,410) Other creditors (2,623) (55,482) Total liabilities (15,319) (65,892) Net assets attributable to unitholders 1,155,243 1,048,504 18

19 Notes to the Accounts (unaudited) Basis of preparation The accounts have been prepared under the historical cost basis, as modified by the revaluation of investments, and in accordance with the SORP for UK Authorised Funds issued by the IMA in May 2014 and in accordance with United Kingdom Generally Accepted Accounting Practice, including Financial Reporting Standard 102 (The Financial Reporting Standard Applicable in the UK and Republic of Ireland (FRS 102)). Accounting policies The accounting policies applied are consistent with those of the annual accounts for the year ended 15 January 2017 and are described in those annual accounts. 19

20 Distribution Table (unaudited) Interim distribution for the six months ended 15 July 2017 Corporate unitholders Equalisation Group 1 Units purchased prior to 16 January 2017 Group 2 Units purchased on or after 16 January 2017 Net Distribution Distribution revenue Equalisation payable paid p per unit p per unit p per unit p per unit A Income units Group Group A Accumulation units Group Group L Income units Group Group L Accumulation units Group Group S Income units Group Group Z Income units Group Group Z Accumulation units Group Group Corporate unitholders receive the dividend distribution payments as detailed below: % of the total distribution is received as franked investment income. Equalisation applies to units purchased during the distribution period (Group 2 units). It is the average amount of revenue included in the purchase price of Group 2 units and is refunded to the holders of these units as a return of capital. Being capital it is not liable to income tax but must be deducted from the cost of units for capital gains tax purposes. 20

21 General Information Manager Schroder Unit Trusts Limited 31 Gresham Street London EC2V 7QA Authorised and regulated by the Financial Conduct Authority Registrar 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 Administration Details Schroders FREEPOST RLTZ-CHSY-HBUT PO Box 1102 Chelmsford Essex CM99 2XX Investor Services Dealing Fax Independent Auditors PricewaterhouseCoopers LLP Atria One 144 Morrison Street Edinburgh EH3 8EX Authorisation Other information The fund is an authorised unit trust and is constituted pursuant to the COLL and is structured as a trust. The fund is a UCITS scheme for the purpose of the categorisation of the COLL. 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 21

22 For further literature please contact Schroder Investor Services on or at or visit our website at Issued in August 2017 by Schroder Unit Trusts Limited, 31 Gresham Street, London EC2V 7QA. Registered No: England. Authorised and regulated by the Financial Conduct Authority. w35641