Schroders Plc · LSE:SDR
Schroders — Schroder Oriental Income Fund — Investor Presentation (December 2024)
31 slides from Schroders's investor presentation, December 2024
Slide 1: Schroder Oriental Income Fund Limited
Marketing material Schroder Oriental Income Fund Limited Richard Sennitt, Fund Manager Abbas Barkhordar, Fund Manager December 2024
Slide 2: Team – Strength in depth
Team – Strength in depth Experienced portfolio managers and analyst team based in London and Asia Schroders Asian team exceptionally well resourced Years of Years with Fund Manager Focus Experience Schroders Shanghai 0 Richard SENNITT Asian Equity Specialist 31 31 Sarah LIU Candice CHEN Kelly ZHANG
Slide 3: NAV performance
Schroder Oriental Income Fund Limited NAV performance Reference Index: MSCI AC Pacific ex Japan Index Current value (£’000): £700,315 Inception date: 28 July 2005 Past performance is not a guide to future performance and may not be repeated. The value of investments and the income from them may go d
Slide 4: NAV performance
Schroder Oriental Income Fund Limited NAV performance Reference Index: MSCI AC Pacific ex Japan Index Current value (£’000): £703,081 Inception date: 28 July 2005 Past performance is not a guide to future performance and may not be repeated. The value of investments and the income from them may go d
Slide 5: NAV performance – discrete yearly returns
Schroder Oriental Income Fund Limited NAV performance Past performance is not a guide to future performance and may not be repeated. The value of investments and the income from them may go down as well as up and investors may not get back the amounts originally invested. The return may increase or
Slide 6: Risk considerations
Schroder Oriental Income Fund Limited Risk considerations – Capital erosion: Where fees are charged to capital instead of income, or a fixed distribution amount is paid regardless of the Company’s performance, there is the potential that performance or capital value may be eroded. – Concentration ri
Slide 7: Market returns
Market returns 12 months to 31 October 2024 Country returns in GBP Sector returns in GBP Past Performance is not a guide to future performance and may not be repeated. Source: Schroders, FactSet, in GBP, net dividends reinvested, as at 31 October 2024. Based on MSCI AC Pacific ex Japan. Countries an
Slide 8: Taiwanese IT was the star of the show with China staging a late rally
Taiwanese IT was the star of the show with China staging a late rally Southbound flows supported China names, while Hong Kong lagged The Global AI (Artificial Intelligence) theme drove IT China staged a recent rally with banks outperforming share prices in Taiwan as well as the US despite deflationa
Slide 9: Performance – Since inception to October 31, 2024
Schroder Oriental Income Fund Limited Performance – Since inception1 to October 31, 2024 Past performance is not a guide to future performance and may not be repeated. The value of investments and the income from them may go down as well as up and investors may not get back the amounts originally in
Slide 10: Annual Dividend Per Share
Schroder Oriental Income Fund Limited Annual Dividend Per Share Past performance is not a guide to future performance and may not be repeated. The value of investments and the income from them may go down as well as up and investors may not get back the amounts originally invested. The return may in
Slide 11: Asian income – earnings and currency key factors
Asian income – earnings and currency key factors Dividends follow earnings with a lag Dividend growth mixed across sectors1 Sterling strength a headwind2 Index Consensus MSCI AC Pacific ex-Japan dividend growth (%) 120 60 50 115 40 30 110 20 105 10 0 100 -10 -20 95 -30 90 -40 Infotech Financials Com
Slide 12: Asian income – reasons for resilience
Asian income – reasons for resilience Sterling a headwind but payout ratios and gearing levels reasonable versus history Payout ratios rose as earnings fell1 MSCI regions (ex-financials) – net gearing trend2 50 70 Net debt to equity % 90 80 40 60 70 30 50 60 50 20 40 40 10 30 30 0 20 20 2004A 2005A
Slide 13: Outlook and positioning
Schroders Outlook and positioning
Slide 14: What we like in the region
What we like in the region Key investment themes Tech Leaders TSMC Samsung Electronics Manufacturing MediaTek Excellence Delta Electronics Shenzhou ASEAN Growth ASE Technology International Singapore Banks UMC Hon Hai ICTSI Sany Heavy Telkom Indonesia Midea Bank Mandiri Kia Bank Negara Kasikornbank
Slide 15: Active country positions as at October 2024
Schroder Oriental Income Fund Limited Active country positions1 as at 31 October 2024 Overweight/underweight positions % of portfolio Underweight Overweight 15.8 Singapore 12.2 12.1 Hong Kong 7.1 24.7 Taiwan 2.4 4.1 Indonesia 2.2 1.0 Japan 1.0 1.0 Vietnam 1.0 19.1 Australia 0.4 1.0 Philippines 0.3 1
Slide 16: Active sector positions as at October 2024
Schroder Oriental Income Fund Limited Active sector positions1 as at 31 October 2024 Overweight/underweight positions % of portfolio Underweight Overweight 34.8 Financials 11.4 30.5 Information Technology 5.0 7.1 Real Estate 3.9 5.7 Consumer Staples 2.4 11.3 Communication Services 1.8 2.4 Energy 0.2
Slide 17: Top holdings by absolute weight
Top 10 holdings by absolute weight Schroder Oriental Income Fund As at 31 October 2024 Stock Country Sector Portfolio weight (%) Benchmark1 weight (%) Active weight (%) TSMC Taiwan Information Technology 11.4 11.7 -0.3 Samsung Electronics2 Korea Information Technology 5.8 3.5 +2.3 Oversea-Chinese Ba
Slide 18: China – weak property market and poor confidence impacting consumer
China – weak property market and poor confidence impacting consumer Stabilisation of property market needed for improvement in sentiment China consumer confidence low1 Resulting in more saving2 Pushing on a string3 Index 3 30 130 160,000 25 125 140,000 4 20 120 120,000 15 115 100,000 5 10 110 80,000
Slide 19: Recent stimulus more coordinated but further policy action necessary
Recent stimulus more coordinated and appears to recognise issues, but further policy action necessary China has thus far focused on ramping up manufacturing investment to offset the property slowdown Domestic China property versus industrial loans1 China stimulus over time2 Renminbi (RMB) trillion %
Slide 20: Trump 1.0 – What happened when tariffs went up?
Trump 1.0 – What happened when tariffs went up? It didn’t stop China growing global export share Chinese yuan renminbi depreciation helped offset China ended up increasing global export share post tariff hikes¹ tariff increase2 20% 16% 1000 Change between Jan-18 and Sep-19 900 15% 800 15% 10% 700 Ju
Slide 21: Since then, China's direct export exposure to the US has fallen
Since then, China’s direct export exposure to the US has fallen Partly reflecting a reorientation of supply chains Meaning less direct sensitivity to US1 Shift away from US & Developed Markets to Emerging Markets2 China % exports to the US Change of export share in overall China and Hong Kong export
Slide 22: Asia's earnings are historically correlated to exports
Asia’s earnings are historically correlated to exports Outlook for global growth and Asia export demand remains key driver 25% % 30% 80 40% 20% 15% 60 30% 20% 10% 40 20% 10% 5% 20 10% 0% 0% 0 0% -5% -10% -20 -10% -10% -20% -15% -40 -20% -30% -20% -60 -30% 2001 2002 2003 2004 2005 2006 2007 2008 2009
Slide 23: Semiconductors still required
Semiconductors still required Long term demand trends around digitisation, cloud, AI, 5G to continue Share of wafer worldwide capacity based on fab headquarters Asian players world class2 location1 1% <1% 5% 21% 25% 14% 33% Taiwan South Korea Japan N. America China Europe ROW Source: 1IC Insights, a
Slide 24: Asian financials – diverse sector
Asian financials – diverse sector Low levels of insurance cover provide growth opportunity, whilst banks offer reasonable returns and attractive yield Insurance penetration1, % of Gross Domestic Product Banks returns and yield2 (GDP) (%) (%) 10% 25 8 9% 7 8% 20 6 7% 5 6% 15 5% 4 4% 10 3 3% 2 2% 5 1
Slide 25: Softer US dollar and peaking US rates historically supportive backdrop
Softer US dollar and peaking US rates historically supportive backdrop for Asian markets Softer dollar and US rates peaking should be supportive 770 Feb-1989 Feb-1995 May-2000 Jun-2006 Dec-2018 150 Jul-2023 670 140 570 130 470 120 370 110 270 100 170 90 70 80 1987 1989 1991 1993 1995 1997 1999 2001
Slide 26: Valuation picture mixed across countries
Valuation picture mixed across countries Broad spectrum of sentiment represented across the region Price earnings ratio (P/E) Next 12 Months of MSCI AC Pacific ex Japan markets since 2010 25 20 15 10 5 0 Australia Taiwan Thailand Malaysia Indonesia Singapore Hong Kong MSCI AC PxJ Philippines China K
Slide 27: Asian market valuations
Asian market valuations Against their history high yielding stocks look relatively cheap versus the market Price / Earnings (PE) FY1 (Fiscal Year) ratio (x) of MSCI AC Pacific ex Japan versus MSCI World relative highest two quintile of yield relative to the overall dividend yield2 market1 1.1 175% 1
Slide 28: Summary
Summary ➢ China's market, having rallied strongly following a co-ordinated stimulus, is now consolidating around the middle of its historic valuation range ➢ Further stimulus measures now expected but property sector still remains a risk. Key will be how stimulus is spent ➢ Geopolitical risks remain
Slide 29: Investment objective and policy
Schroder Oriental Income Fund Limited Investment objective and policy The investment objective of the Company is to provide a total return for investors primarily through investments in equities and equity related investments, of companies which are based in, or which derive a significant proportion
Slide 30: Important information
Important information Marketing material. Costs: Certain costs associated with your investment in the fund may be incurred in a different currency to that of your investment. These costs may increase or decrease as a result of currency and exchange rate fluctuations. If a performance fee is applicab
Slide 31: Thank you
Schroders a Thank you
Schroder Oriental Income Fund — Investor Presentation (December 2024) on 6ix