Aberdeen Asian Income

[Avantegarde]

I have had this IT in my portfolio of about 14 ITs for the past five years or so. I am now thinking about dumping it. When I first bought it, its 5-year total return figure was well over 100% and its dividends had risen at more than 4.5% a year for the previous five years. Things have taken a big turn for the worse: those two metrics now stand at 21% and 2.6%. In other words, abysmal share price growth over five years (the worst of any of the trusts I still hold, but not as bad as Merchants which I dumped a while ago for similar reasons) and dividends rising at a rate slower than UK inflation. I am thinking of simply putting the money into a Pacific ex-Japan tracker, costing one tenth of the OCR that Aberdeen levies. What do other investors in this IT think?
NB: All stats from the AIC website.

[bluedonkey]

Oh dear! I've just bought it. A market is made up of both buyers and sellers, I suppose. It's on a discount and yielding 4%.

[shawsdale]

On several occasions in the last couple of years I've looked at Aberdeen Asian Income in the context of trying to increase my Asian and emerging market weighting.
Each time I've invested elsewhere having noted the relatively mediocre performance of AAIF and its pronounced positioning in Singapore (currently 27%) and Australia (currently 16%).

The alternatives I've chosen have been:
1. JP Morgan Asian (JAI)
This is primarily a large cap Asian growth trust which has recently instituted a dividend policy paying 1% of NAV each quarter primarily out of capital. I chose this not just for the income, but to provide exposure to the likes of Samsung, Tencent, Alibaba, the strong performance of these doubtless being a key factor in this trust's positive outcome during 2017. At the moment JAI is on a discount of around 8%-10% and has 33% weighting to China, 20% to Korea.

2. Wisdom Tree Emerging Markets Small Cap Dividend ETF (DGSE)
As a very long-term investor I'd been looking for Asian small cap investment vehicles, ideally that pay a dividend, given that most of the Asian income funds and trusts seem to focus on larger cap stocks.
This ETF has performed well in capital terms since I made a purchase in late 2016, albeit the dividend yield, paid twice a year, seems to be below 3%. That said, the January 2018 distribution of $0.2769 was a marked increase on January 2017's $0.2295. DGSE invests in the wider global emerging markets universe, but has 24% weighting to Taiwan and 17% to China.

If income is not a pressing concern then Baillie Gifford's Pacific Horizon trust (PHI) might be worth a look, but as with JAI the heavy weighting to China and Korea should be noted.

[richfool]

I think it's important to note that Aberdeen Asian Income (AAIF) has been and is a higher yielding, lower risk trust in that sector, as well as being conservatively managed, and has kept its exposure to China and Chinese growth stocks low. Therefore one shouldn't expect it to be amongst the top performers in growth terms. It's a case of "horses for courses".

In that sector I have held AAIF and SOI (Schroder Oriental Income) for around 5 years and my holdings, which have involved a bit of tinkering, are up 34% and 40% respectively. AAIF has been paying me paying the higher dividend of the two, though not by a lot.

I recently added JAI (JP Morgan Asian), specifically because of its targetted higher yield (drawing upon capital) and its exposure to growth stocks, including Chinese stocks. Though I expect that to come with a higher risk and volatility.

The performance of trusts will inevitably "ebb and flow", indeed I recollect when first buying into AAIF, that Pacific Horizon (PHI) was at that time a poor performer, but now note it is now amongst the better performers in that sector, based on capital growth, but it has no dividend yield, which brings me back to my point about "horses for courses".

http://citywire.co.uk/money/investment- ... Period:60;

[BrummieDave]

In a 'horses for courses' context, there's also Henderson Far East Income too of course, high yield at 5.4%, mostly well established stocks (ie not leading edge tech), 20% China, 20% Australia, 15% Taiwan, a just about reasonable TER of 1.1%, and trading at a slight premium to NAV.

It's not going to 'pull up any trees' on the growth front, but I'd like to think the capital will appreciate over the long term whilst proving a good income stream in the meantime.

[Avantegarde]

In a 'horses for courses' context, there's also Henderson Far East Income too of course, high yield at 5.4%, mostly well established stocks (ie not leading edge tech), 20% China, 20% Australia, 15% Taiwan, a just about reasonable TER of 1.1%, and trading at a slight premium to NAV.

It's not going to 'pull up any trees' on the growth front, but I'd like to think the capital will appreciate over the long term whilst proving a good income stream in the meantime.

I also sold my holding in Henderson Far East recently because of its more than 50% exposure to China, S.Korea and Taiwan. Why? Because of the risk (which I think is still very real) of nuclear war in Korea. It's not just the possibility of share prices falling in the region and elsewhere after such an event that bothers me. It's the fact that such a dreadful event would mean the destruction of people, capital and economic capacity on a massive scale. I'd rather not have much of my money invested directly there while at such risk. If it becomes clear that war is not a likely option I may well reinvest in that IT. Its total return and dividend growth have been much better than that of Aberdeen Asian Income in the past five years.

[tjh290633]

I put my wife into BNY Mellon Newton Oriental about 20 years ago. It was 10% of a transferred PEP and in terms of capital performance it has shone. Unfortunately I can't easily provide data, because the class of units has been changed, but with dividends (such as they are) reinvested, it has risen to 24% if the total. The value is about 10 times the original stake.

The XIRR has been 12.6% since August 1998.

TJH