RCS - Schroder AsianTR Inv - Results analysis from Kepler Trust Intelligence

Schroder Asian Total Return InvestmentAnnouncement

16/09/2025 12:00

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RNS Number : 5526Z  Schroder Asian Total Retn InvCo PLC  16 September 2025

Schroder Asian Total Return (ATR)

16/09/2025

Results analysis from Kepler Trust Intelligence

Schroder Asian Total Return (ATR) has released its half year results for the
period ending 30/06/2025. The trust saw a NAV decrease of 2.4% on a total
return basis, versus the reference index which rose 4.3% over the same period.
Returns since period end have been strong, with ATR returning 10.8% to
09/09/2025.

Managers Robin Parbrook and King Fuei Lee have delivered excellent long-term
returns, with five-year NAV of 44.5% and ten year returns of 222.7%, or 12.5%
annualized (to 09/09/2025). ATR continues to have the narrowest discount in
the peer group, reflecting the strong track record.

Two key factors have impacted performance. Firstly, the strength of China and
Hong Kong. Holdings Tencent and Netease contributed positively, whilst not
owning "old China" consumer stocks also proved beneficial. However, not
holding domestically focussed consumer stocks was a headwind. Secondly, Korea
which rallied on reform hopes, although the managers note these have often
failed to materialise. Their two Korean holdings did contribute positively
though.

The portfolio construction approach uses clusters which has balanced defensive
exposure with attractive yields, against structurally challenged areas.
Additional clusters offer a balance of strong growth potential against more
volatile politics. Hedging strategies are also used. The short-term models
indicate a neutral to positive view, whereas their longer-term models indicate
caution. As such, they have a small short exposure, which they may increase
depending on pricing.

At the end of the period the level of gearing was 6.7%. Shortly after the
period end, the managers took out a new RCF with a lower capacity reflecting
an increased use of derivatives (CFDs).

Chair Sarah MacAulay commented on the "consistently strong long-term track
record" noting that "NAV total return has outperformed the Reference Index
over 3, 5 and 10 years".

Kepler View

Robin Parbrook and King Fuei Lee, managers of Schroder Asian Total Return
(ATR) have a long-term time horizon, which has been reflected in very strong
returns over multiple time periods. The managers' use of bottom-up stock
selection, top-down overlays and hedging strategies as one interconnected
approach makes ATR a unique proposition in our view.

The portfolio construction approach is also a standout. The managers are
benchmark-agnostic therefore position the portfolio depending on where they
find the best opportunities. By using investment clusters, they can create a
differentiated profile that can distinguish itself from peers. The current
bias to the more defensive and yield-generative markets could prove beneficial
in more volatile times. Similarly, the hedging strategies could offer downside
protection.

The trust has experienced some short-term headwinds which are arguably out of
the managers' control. Similarly, consumer stocks, driven by likely temporary
trends have performed well. Robin and King Fuei caution these are unlikely to
drive long-term returns and have therefore remained on the sidelines, albeit
at the expense of near-term performance.

We believe the post-period bounce back demonstrates this transience, with ATR
rising over 10% to 09/09/2025, with long-term returns still considerably ahead
of the trust's reference index. Despite this, ATR's discount has widened
slightly, albeit remaining the narrowest of peers, which could provide an
attractive entry point.

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