The trust has today announced results for the full year to end August 2014 (link via Investegate). Following on from last years return of 15.6%, share price total return for 2014 has increased by a very acceptable 15.2%, compared to the benchmark index of 11.3%. Over the past 5 years, average returns have been 15% per year (CAGR) compared to 7.0% for the benchmark MSCI Asia Pacific Index.
Income has been curtailed by foreign exchange headwinds and has fallen 7% to 8.12p ((8.74p 2013). However, this still covers the dividend which has again been increased from 7.45p to 7.65p. A final dividend of 3.15p will be paid 28th November. Based on a share price of 193p, this gives a current yield of 3.9%.
Net assets of SOI have increased some 8% from £395m to £428m. Of course, management fees correspond to the value of net assets and I am pleased to note these have reduced some 7.5% from £5.7m (2013) to £5.3m this year which includes a performance fee of £1.8m (£2.4m 2013). Ongoing charges are therefore reduced from around 1.6% to 1.3%. I am hoping the management may follow the trend of many other leading investment trusts - City of London, Edinburgh are two examples - and abandon performance fees before too much longer. This would make the trust even more attractive to investors - institutional and small retail alike.
The basic fee is 0.75% of the net assets. The Manager is also be entitled to a performance fee of 10% of the amount by which the adjusted net asset value at the end of the relevant calculation period exceeds a hurdle of 107% of the adjusted net asset value at the end of the previous period multiplied by the time weighted average of the number of shares in issue during the year (still with me?!!).
The portfolio is spread far and wide - the main areas for investment are Australia, Singapore, Hong Kong, Taiwan, Thailand, China and S. Korea.
At a stock level we continue to believe that the longer-term case for income investing in Asia remains securely based. The equity markets offer a diverse range of countries and sectors where solid income stocks can be found, and we take comfort in the strong aggregate metrics of the Company's portfolio in terms of superior cash generation, higher than average returns on equity and lower financial gearing".