Emerging Markets  

Aberdeen Standard shakes up Asian trust

Aberdeen Standard shakes up Asian trust

Aberdeen Standard has focused the portfolio of its Asian smaller companies trust as it appoints regional stalwart Hugh Young to lead the fund.

As part of the changes, the £486m Aberdeen Asian Smaller Companies trust will change its name to the Aberdeen Standard Asia Focus and Hugh Young, head of Asia Pacific at Aberdeen Standard Investments, will become its named manager.

The trust will cut the number of companies it holds from around 80 to 60, with a core holding of 30, its directors announced today.

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Meanwhile the management fee to be cut to 0.96 per cent from 1 per cent and will be based on the market capitalisation rather than net asset value (NAV).

Nigel Cayzer, the trust's chairman, said having a more focused portfolio of "best-in-class smaller companies" would have a positive effect on the trust's performance.

He said: "As [Asian] markets are becoming larger and more complex we have, in conjunction with Hugh Young and the team at Aberdeen Standard Investments in Singapore, sought to streamline the investment approach while retaining the focus it requires to continue building on the successes it has enjoyed over the past 23 years."

Mr Cayzer said the trust's discount to NAV per share widened to 14.8 per cent as of 31 July 2018 because of the caution investors had towards emerging markets amid nervousness over the direction of US foreign policy and the prospect of a trade war with China.

He added: "The fundamental attractions of investing in Asia-Pacific remained strong, with the region accounting for nearly two-thirds of global growth.

"The growing middle class of industrious, well-educated and innovative people has fuelled the creation of new companies across the region. The rise in disposable incomes has led to expanding domestic markets that are much less dependent on exports than was the case 20 years ago."

The trust's NAV rose 4.6 per cent in the 12 months to 31 July, 2018, in sterling total return terms, while the MSCI Asia Pacific ex Japan Small Cap Index, returned 6.1 per cent

But Mr Cayzer said its performance in the second half of the year was much stronger and it outperformed its benchmark by 6.9 per cent.