Ex divi this morning |
HFEL performance has improved since new Managers and new tactics. I hold both. |
HFEL has outperformed it over a year - TR of 26% vs 23%. It could, of course, be a blip. |
This has performed better than HFEL over 3,6 and 12 months, 1,3 and 5 years. |
There are a lot of ifs there. Given the recent strong organic growth in income the trust is already yielding 6.38%. You could have a yield on cost of 10% in a few years' time anyway without their "enhanced dividend policy" which is as likely to see a static or falling payout as it is to see a rising one. EAT and BRLA, refer. |
 I think this is very positive news. If they can get NAV up, which they will if Asian Markets perform well, the dividend yield could get to well over 10%.
A risk is that they make the same mistake as HFEL and let their determination to pay big dividends come at the expense of capital gains, but this bit from their update today is reassuring on that risk:-
“Importantly, there will be no change to the investment process nor to the Company’s strategy as a result of the new policy. The Investment Manager will continue to seek quality, cash-generative businesses with strong management teams, at sensible valuations, that have the potential to deliver reliable income and capital growth for ourinvestors.
The enhanced dividend policy reflects the Board’s confidence in the long term robust opportunities in Asian markets, where dividend yields and growth have outpaced those of Europe and the US. With over 50% of total returns in Asian equities now driven by dividends, and with companies in the region demonstrating stronger balance sheets and increasing free cash flow coverage for dividends, the potential for rising payout ratios is compelling.” |
Were shareholders consulted on these changes? I've just read last summer's report and can find no mention of them. Nor can I find any contact details for the Chairman. I see there's also going to be a continuation vote every three years. The danger with these is that they attract SABA-style profiteers. There's nothing in today's announcement that protects the interests of long-term investors; quite the opposite. |
15 Jan NAV Including Income 252.53p |
Personally I don't like this. The attraction of AAIF was the predictable yield.
If it moves to a fixed amount of assets per quarter is it sustainable or will it end up eating its own tail? I suspect the latter. |
The USP of income ITs is their ability to use reserves to provide steady income in bear markets. When they transition to this model they destroy their key advantage. Why continue to invest in AAIF when an open-ended fund or a much cheaper ETF is now likely to do a similar job? |
''The fund has the second-highest yield within the five-strong AIC Asia Pacific Equity Income sector, while its NAV has outpaced the performance of the MSCI AC Asia Pacific Index, which is used as a reference, over the last three and five years.''
HFEL the highest yielding has a poor track record yet trades at a premium to NAV (bonkers!) ......[...] |
I really don't like these policies of paying a percentage of NAV as a dividend. For sure, it's great in a rising market but disastrous in a protracted bear market. The whole point of holding ITs for income is their ability to maintain or even increase payments in difficult times. Will sell here after it's gone ex and move the funds into SOI, HFEL and MYI. |
abrdn Asian Income Fund (AAIF.LN) has announced an enhanced dividend policy, the introduction of a continuation vote and its final dividend declaration. In detail: An enhanced annual dividend policy of 6.25% of average net asset value ("NAV"), equating to a notional dividend yield of 7.1% based on share price (applies from the start of the 2025 financial year);Introduction of a continuation vote every three years; andA dividend for the fourth quarter of 2024 of 6.78 pence per Ordinary share, resulting in a full year dividend of 14.43 pence per share, an increase of 22.8% compared to the previous year. |
Edison Research video |
Manager presentation - |
htTPs://www.abrdn.com/en-gb/aaif/news-and-insights/insights/asia-and-the-influence-of-the-us? |
Baillie Gifford fund manager opinion-
Qian Zhang: Asia is growing faster than the rest of the world. A lot of these Asian companies are at
the forefront of deep structural global trends. Whether it is technology hardware produced by Asian
companies, or natural resources that are found in Asia, but are essential for global green transition,
all of these are great growth opportunities for long-term investors to explore.
Samsung is a Korean technology conglomerate. What is in common among a smartphone, a
personal laptop, electric vehicle and a computer datacentre? All of them could have Samsung
products in them. One of the very key themes for the next decade is the promise of AI. The story is
gradually shifting from what we call a computing AI to what we call consumer AI. That means
getting your devices ready for AI, getting the chips and the applications installed, and that could lift
a whole upgrade cycle for consumer electronics. It could be more significant than the first
introduction of the smartphones themselves 15 years ago. |
Sister fund
free stock charts from uk.advfn.com |
Such a contrast with HFEL. Puzzling. |
Small mention here...HTTps://www.ajbell.co.uk/articles/investmentarticles/281654/revealed-investment-trusts-yielding-45-or-more |
29 Oct NAV abrdn Asian Income Fund Limited Undiluted Including Income
247.92p |
Fund managers’ report
Market and portfolio review
Asian markets posted decent returns in September, supported by the start of
the US Federal Reserve’s (Fed) policy easing cycle but with most of the gains
occurring in the last few trading days of the month, largely driven by a sharp
rally in China. The Fed cut its policy rates on 18 September, opening a window
for the People’s Bank of China (PBOC) to implement a more aggressive and
coordinated monetary policy combination, including rate cuts and lending
facilities for equity purchases and buybacks. This was reinforced by a Politburo
meeting on 26 September following which we saw a loosening of housing
policies. Stocks in Thailand also outperformed the region as the government
initiated some economic stimulus policies. In India, the market was flat and
underperformed despite the World Bank raising its full-year GDP forecast for
the country. Taiwan also ended the month flat while the Korean market was
one of the few across the region to remain in negative territory, continuing its
volatile trend this year.
In corporate news from our holdings, China’s Autohome announced that
it has decided to pursue a US$200 million (£150 million) share repurchase
programme over the next 12 months. Together with annual dividends, it brings
Autohome’s annual shareholder return up to a decent 13.7%.
In terms of portfolio activity in September, we initiated a new position in China
Construction Bank (CCB) the second-largest state-owned enterprise (SOE)
bank in China, with a strong and stable retail deposit base and low funding
costs. Its retail book is heavily weighted to lower-risk mortgages with some
skew towards infrastructure loans. Within state-owned banks, CCB has its
advantages in retail deposit and mortgages. Along with prudent management,
CCB continues to stand out as a relatively better player.
Conversely, we exited our holding in Auckland International Airport in view of
better opportunities elsewhere.
Outlook
As we head into the final months of 2024, we’ve seen stocks across Asia
rebound on the back of the Fed’s rate cut and China’s fresh stimulus. The
question now is whether the Chinese authorities follow through with fiscal
measures aimed at boosting the demand side and reviving consumer
sentiment and consumption. Other key areas of focus would include rising
geopolitical risks in the Middle East, where Iran’s missile strike has increased the
risk of a broader escalation, with direct conflict between Iran and Israel now
more likely. Oil prices have spiked in response to the fragile and rapidly evolving
situation, and we are monitoring developments closely. In the US, it remains
a tight race between Donald Trump and Kamala Harris in the run-up to the
5 November presidential election, with the outcome bringing implications
around trade, tariffs and foreign policy to Asia.
Returning to Asia, India continues to be a bright spot given the positive macro
backdrop. Valuations remain full, but we continue to see opportunities from
a selective bottom-up approach in high quality companies benefitting from
structural tailwinds. We are also positive about the longer-term outlook of
the technology sector, albeit sentiment across the tech supply chain has
weakened because of concerns about the risk of a US recession and weakness
in the smartphone and PC segments. Longer term, we see structural growth in
generative artificial intelligence (AI), which might mean multi-year structural
demand for data centre content and infrastructure upgrades, boding well for
the advanced semiconductor sector.
We continue to believe that Asia remains home to some of the highest quality
and most dynamic companies in the world. The region continues to offer
rich pickings, underpinned by long-term structural growth trends such as the
rising middle classes, rapid adoption of emerging technologies and continued
urbanisation, enabling bottom-up stock pickers like us to deliver sustainable
returns over the long term.
We have continued to tighten the quality characteristics of our portfolio,
introducing and adding to names with greater near-term earnings visibility
and steady cash flow generation, while actively reducing and exiting names
where earnings are less visible. More broadly, we maintain our conviction in our
holdings and their ability to navigate the various crosswinds buffeting markets,
given their quality and fundamentals, which we believe will deliver good
dividends for shareholders over the long run. |
21 Oct NAV abrdn Asian Income Fund Limited Undiluted Including Income 256.64p |
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