Aberdeen Asian Income Fund Limited sees net asset value fall by 6.5% in last six months
Aberdeen Asian Income Fund Limited, a fund managed by Aberdeen Standard Investments, has been seen its net asset value (NAV) fall by 6.5% in sterling terms in last six months, according to the fund’s interim results.
The decline in NAV is compared to the MSCI All Countries Asia Pacific ex-Japan High Dividend Yield Index’s 7.0% decline over the same period and the MSCI All Countries Asia Pacific ex-Japan Index, which increased by 0.8%.
The share price’s total return for the fund was -12.8%.
It is notable that the MSCI All Countries Asia Pacific ex-Japan Index rise was largely driven by lower yielding growth stocks, and this is indicated in the relative resilience in your company’s NAV against the high yield index.
Over ten years to 30 June 2020, the company’s NAV has increased by 113.6%, compared to a rise of 108.6% from the MSCI All Countries Asia Pacific ex-Japan High Dividend Yield Index. Over the same period the MSCI All Countries Asia Pacific ex-Japan Index returned 121.2%. The share price’s total return was 86.2%.
Over the six months ended 30 June 2020, two dividend payments totalling 4.5p per share were distributed to shareholders. This represented an annualised dividend yield of 5.0%.
The company is a “next generation dividend hero” as recognised by the Association of Investment Companies, having raised dividends for at least 10 years. Charles Clarke, chairman of Aberdeen Asian Income Fund, said that the board is mindful of the company’s objective of growing dividends over time and is keen to retain its ‘AIC Dividend Hero’ status.
He added: “Therefore, where necessary, it will consider using the company’s healthy revenue reserves built up over the past decade.”
Commenting on the results, Mr Clarke said: “The first six months of 2020 was one of the most challenging ever for markets worldwide, Asia included, as the onset of COVID-19 not only disrupted economic activity, but also life as we know it.
“As a result of the pandemic, the company’s performance was materially affected. In particular, it was impacted by its light exposure to China, as the mainland market was the first to reopen following months of lockdown.
“Performance was also reined in by the lack of exposure to Chinese internet stocks, such as Tencent and Alibaba that surged on the back of growing online demand for their services amid the lockdown. Your company does not hold these names as they do not boast much of a yield.
“During this turbulent period, your manager remained engaged with the portfolio’s underlying companies, discussing their business continuity plans and readiness to overcome the current disruption. It was reassuring to see that most of your portfolio’s holdings have undertaken strategic reviews and adopted processes to weather the storm.”
Yoojeong Oh, manager of Aberdeen Asian Income Fund, added: “Our focus remains on investing in good quality, market leading companies that are tapped into Asia’s structural growth.”