Schroders Plc · LSE:SDR
Schroders — Schroder AsiaPacific Fund — Investor Presentation (January 2025)
30 slides from Schroders's investor presentation, January 2025
Slide 1: Schroder AsiaPacific Fund plc
Marketing material Schroder AsiaPacific Fund plc Richard Sennitt, Fund Manager Abbas Barkhordar, Fund Manager January 2025
Slide 2: Investment philosophy
Investment philosophy We believe that Asian stock markets are inefficient and provide strong potential for adding value through active fund management. We believe that this value is best extracted using a fundamental bottom-up approach. The durability of earnings and the alignment of our interests w
Slide 3: 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 Abbas Kelly
Slide 4: Performance
Schroders Performance
Slide 5: Investment objective and policy
Schroder AsiaPacific Fund plc Investment objective and policy The Company's principal investment objective is to achieve capital growth through investment primarily in equities of companies located in the continent of Asia (excluding the Middle East and Japan), together with the Far Eastern countrie
Slide 6: NAV performance
Schroder AsiaPacific Fund plc NAV performance Benchmark: MSCI AC Asia ex Japan Index1 (net dividends reinvested) Shareholder funds : £919.2 million Inception date: 20 November 1995 Past Performance is not a guide to future performance and may not be repeated. The value of investments and the income
Slide 7: NAV performance
Schroder AsiaPacific Fund plc NAV performance Benchmark: MSCI AC Asia ex Japan Index1 (net dividends reinvested) Shareholder funds : £872.4 million Inception date: 20 November 1995 Past Performance is not a guide to future performance and may not be repeated. The value of investments and the income
Slide 8: NAV Performance
Schroder AsiaPacific Fund plc 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. Exchange rate changes may cause the
Slide 9: Market returns
Market returns 12 months to 31 December 2024 Country returns in GBP Sector returns in GBP 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 i
Slide 10: 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 theme drove IT share prices in Taiwan as China staged a recent rally with banks outperforming well as the US despite deflationary pulse 340 Index, 100 =
Slide 11: Performance – Since inception to December 31, 2024
Schroder AsiaPacific Fund plc Performance – Since inception1 to December 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 invested.
Slide 12: Risk considerations
Schroder AsiaPacific Fund plc Risk considerations – Concentration risk: The Company may be concentrated in a limited number of geographical regions, industry sectors, markets and/or individual positions. This may result in large changes in the value of the company, both up or down. – Currency risk:
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 Nien Made ASE Technology CATL Healthcare E Ink Shenzhou International Bangkok Dusit Infosys Techtronics Medical Services TCS Shenzhen Inovance Apollo Hospitals F
Slide 15: Active country positions as at 31 December 2024
Schroder AsiaPacific Fund plc Active country1 positions as at 31 December 2024 Overweight/underweight positions % of portfolio Underweight Overweight 12.5 Hong Kong 7.8 8.6 Singapore 4.6 3.4 Vietnam 3.4 2.9 Philippines 2.3 2.0 Australia 2.0 3.5 Thailand 1.8 1.5 United Kingdom 1.5 23.2 Taiwan 1.0 2.1
Slide 16: Active sector positions as at 31 December 2024
Schroder AsiaPacific Fund plc Active sector1 positions as at 31 December 2024 Overweight/underweight positions % of portfolio Underweight Overweight 29.1 Financials 7.1 32.8 Information Technology 5.6 13.1 Communication Services 2.9 3.5 Real Estate 1.3 4.3 Health Care 0.8 6.5 Industrials -1.0 2.0 Ma
Slide 17: Semiconductors are increasingly made in Asia
Semiconductors are increasingly made in Asia Long term demand trends around digitisation, cloud, AI, 5G to continue Worldwide share of fab capacity1 Asian players world class2 Global 200mm+ commercial semiconductor fab capacity by region 100% 2% Number of Players With a Leading Edge Logic Fab 7% 11%
Slide 18: 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 19: Top 10 holdings by absolute weight
Top 10 holdings by absolute weight Schroder Asia Pacific Fund As at 31 December 2024 Stock Country Sector Portfolio weight (%) Benchmark1 weight (%) Active weight (%) TSMC Taiwan Information Technology 12.6 11.9 +0.7 Tencent China Communication Services 8.0 5.1 +2.9 Samsung Electronics* Korea Inform
Slide 20: 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 21: 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 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% 20% 15% 60 30% 10% 40 20% 10% 5% 20 10% 0% 0% 0 0% -5% -10% -10% -20 -10% -20% -15% -40 -20% -30% -20% -60 -30% 2001 2002 2003 2004 2005 2006 2007 2008 2009
Slide 23: 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 24: 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 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 Jul-2023 150 670 140 570 130 470 120 370 110 270 100 170 90 70 80 1987 1989 1991 1993 1995 1997 1999 2001
Slide 26: Trump 2.0 is clearly a headwind for Asia
Trump 2.0 is clearly a headwind for Asia Markets look to be anticipating a fairly bleak outcome Asia ex Japan versus Developed Markets1 Asia ex Japan versus Developed Markets relative US$, Total return index, 100 = 31 December 2023 forward 12m consensus Price/Earnings (P/E) ratio2 106 130% US electi
Slide 27: 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 30 25 20 15 10 5 0 India Taiwan Thailand Malaysia Singapore MSCI AC AxJ Hong Kong Indonesia Philippines China Ko
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: 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. For further information regardin
Slide 30: Thank you
Schroders a Thank you
Schroder AsiaPacific Fund — Investor Presentation (January 2025) on 6ix