Trustnet Magazine Issue 13 December 2015 | Page 22

INVESTMENT STRATEGY

INVESTMENT TRUST
STRATEGY
Finding winning
stocks in Asia

Schroders’ investment trust managers explain how they filter what really matters when
researching local opportunities in Asia

W

hen conducting stock
research, it is natural
to look at the current
dividend yield and examine past
performance. But Matthew Dobbs,
manager of the Schroder Oriental
Income Fund Limited and Schroder
Asia Pacific Fund plc, says it is
important to focus on a stock’s
dividend potential rather than its
current yield. The latter, he explains,
may be misleading due to factors
such as a one-off special dividend or
a sudden ramp-up in payouts.
“In a world where interest
rates are still low and many
developed economies are on the
cusp of deflation, investing in
Asian dividend stocks could offer
investors both long-term capital
appreciation and a steady income
stream,” he notes.

LOCAL EXPERTISE

Dobbs has a strategy of thorough
due diligence and trusting his
team’s judgement – which proved
successful this year. “Particularly
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in China,” he said, “where our
warnings of a market bubble driven
by borrowing money to make
investments were vindicated when
stock prices collapsed in the middle
of the year. This further reinforced
our view that investing in the
region requires seeking out quality
companies that provide consistent
shareholder returns a