Schroder Asian Total Return: A bet on China's growing middle class – with less risk
What does it do?
Invests in firms across Asia, excluding Japan, with a leaning towards smaller and medium sized businesses. Around 30 per cent of its money is in Hong Kong.
What does the manager invest in?
Managers Lee King Fuei and Robin Parbrook are looking for companies set to benefit from long-term trends in the region, such as urbanisation and a growing middle class.
Parbrook says: ‘Stock markets in Asia recovered well in March and April from a rout but we’re not sure how sustainable that rally is and we are making limited investment decisions.’
A favourite is power tools maker Techtronic, which has 70 per cent of its sales in the US.
He also likes Jardine Matheson, which benefits from the growing consumer markets in Asia with its businesses in property, retail, distribution, insurance and hotels.
What do the experts think?
Jason Hollands, managing director at Tilney Bestinvest, says: ‘It’s a good choice for more cautious savers looking to dip their toes into Asia.’
What do the experts like?
A bit like an absolute return fund, part of the trust’s strategy is to try to protect savers’ cash if the stock market dips, which helps add a bit of confidence to investing in a risky region.
For example, the Asia excluding Japan Index has fallen 13 per cent over the past year, while this trust has managed to stay just about in the black with a return of 0.4 per cent.
And are there any downsides?
China has been concerning experts for some time as its economic growth slows and its growing middle class become more important to companies.
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