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A large proportion of that weighting was in the Taiwan Semiconductor Manufacturing Company ( TSMC ). The company has seen its dividend increase considerably since it started regularly paying dividends some 20 years ago and has been a SOI holding for over 10 years .
Another major holding in the sector is Samsung Electronics . This Korean company also improved its dividend track record that , like TSMC , it has balanced against reinvestment to deliver strong total returns for shareholders .
This is not to say that the entire portfolio is invested in technology stocks . Many companies are more of what you ’ d expect for a trust seeking to deliver income as part of its total return strategy . For example , the trust is currently overweight financials .
However , these companies tend to have a very different profile to their UK -listed peers and are typically less leveraged . For example , SOI currently has a large overweight position to
Singapore . That includes holdings in telecoms business Singtel and financial services group OCBC Bank .
Both companies do most of their business in Southeast Asia and Australasia . OCBC is particularly interesting in this regard , as it provides indirect exposure to the ASEAN region , but with a strong level of corporate governance .
Like their more tech-oriented peers , these are still large multinational companies . But their revenues and , as a consequence , the dividends they pay , are influenced by very different factors compared to the London-listed dividend stalwarts that appear in so many UK income investors ’ portfolios .
As a result , SOI doesn ’ t just offer income investors an attractive yield , driven by some exciting businesses . It also provides income investors with the opportunity to diversify their existing portfolios – something that should never be overlooked .
Our analysts say : “ We think that SOI is an attractive way to access the
“ THESE COMPANIES TEND TO HAVE A VERY DIFFERENT PROFILE TO THEIR UK LISTED PEERS AND , TYPICALLY , THEY ARE LESS LEVERAGED …”
compelling opportunity of the growing dividend culture in Asia , alongside the economic potential , through Richard ’ s natural income growth approach . The trust has one of the best track records in the sector since inception , and has performed well since Richard took over as lead manager in December 2020 .
“ Despite this , the trust has fallen to a discount below its long-term average . We note the trust has traded at a premium on multiple occasions in the past five years and also has typically traded at a narrower discount than its sector average , which is no longer the case . For both reasons , we think the current rating could be an opportunity and , in our view , if sentiment changes towards the sector , this anomaly could change quickly .”
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