Schroder AsiaPacific (SDP)

Schroder AsiaPacific’s (SDP) portfolio is populated using a bottom-up stock selection process driven by the experienced management team of Abbas Barkhordar and Richard Sennitt. They leverage the extensive resources of the wider Schroders network to identify a concentrated number of high-quality, primarily large-cap companies from across the Asian region.

The region has undergone a period of notable volatility in the past few years, and the managers have capitalised on this in the near term to tweak the Portfolio allocations, adding to quality names at attractive valuations. For example, Abbas and Richard have had a long-standing underweight to China, which has been positive for performance over the long term. However, during a challenging period for the country in early 2024, the managers added selectively to some high-quality, industry leaders at attractive valuations, which has helped narrow this underweight. Furthermore, they also capitalised on the country’s rally in late 2024 to sell some other holdings that had performed well, though the managers remained concerned over the industry backdrop. Despite this, China remains a notable underweight allocation.

Despite the near-term volatility in wider markets, including surrounding the recent tariff announcements, SDP has delivered strong, long-term returns versus its benchmark, having outperformed in six of the past nine years by an average level of 4.4 percentage points. Cumulatively, the trust is over nine percentage points ahead over five years. The majority of the trust’s long-term performance has been a result of good stock selection, which has often helped drive outperformance even when positioning has been less favourable.

This strong performance track record has not been reflected in the current Discount, which is close to one standard deviation wider than the five-year average at the time of writing. This is despite the board having undertaken a considerable, NAV accretive buyback programme over several years.