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Income investing can often seem like a drab affair for UK investors . Financials and oil majors may be reliable but they aren ’ t businesses that are likely to stoke a huge amount of enthusiasm .
Asian markets show that you can invest for income but also gain access to more innovative businesses . This may sound counterintuitive , partly because we ’ ve come to think of tech firms as not paying dividends but also because of a similar stereotype about Asian companies .
This view doesn ’ t hold up when you look at the facts . For example , more than 50 % of the total returns that the MSCI AC Pacific Ex Japan NR delivered in
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the two decades up to the end of 07 / 11 / 2023 were from dividends being reinvested .
This was substantially higher than the S & P 500 , where dividends accounted for approximately 28 % of the index ’ s total return over the same period . In other words , the proportion of total returns in a two-decade long period attributable to dividends was higher in Asia than it was in the US .
Schroder Oriental Income ( SOI ) illustrates how investors can take advantage of this . The trust , which is managed by Richard Sennitt , focuses on investing in a set of quality Asia -Pacific companies with long term growth prospects , that
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also have the potential to pay a sustainable rising dividend .
The aim is for the trust to generate an attractive dividend as part of a wider total return strategy . As at 13 / 10 / 2023 , the trust had a nearly 5 % yield on a trailing twelve-month basis .
The trust ’ s portfolio today is also indicative of the fact that you can invest in a wide range of types of businesses in Asia including those that are more growth-oriented and still generate an attractive dividend yield . For example , just over a quarter of the trust ’ s portfolio was invested in the information technology sector at the end of August 2023 .
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