Invesco Asia Dragon (IAD)

Invesco Asia Dragon (IAD) has delivered sector beating Performance over both the short and long term, aided by managers Fiona Yang and Ian Hargreaves’ contrarian approach, which has generated alpha in a variety of market conditions. Asian equity markets have broadly performed well in the past year on the back of a weakening US dollar, a recovery in China, as well as other country-specific factors, which Fiona and Ian were well positioned for, leading to good alpha generation in a rising market.

Even after this good performance, the managers remain contrarian and are beginning to pivot the portfolio away from some of the names that drove performance, such as technology and financial firms, and are rotating into areas they deem better value on a stock-specific basis. Due to the approach, the Portfolio has often looked and performed differently from many comparators, and these changes continue to drive a potential diversion. In light of wider market valuations rising above long-term averages, the managers have reduced Gearing to zero in order to mitigate risk. That said, the portfolio remains at a notable discount to the market.

Elsewhere, IAD pays an enhanced Dividend of c. 4% of NAV in four quarterly instalments. This changed from a semi-annual payment following the completion of the combination with the former Asia Dragon (DGN) trust in early 2025. As a result of this combination, assets have increased substantially, which has not only improved liquidity of the trust’s shares but also contributed to IAD having some of the lowest Charges in the peer group.