Annual Financial Report
Summary by AI BETAClose X
Invesco Asia Dragon Trust plc
Annual Financial Report Announcement for the Year Ended 30 April 2026
The following text is extracted from the Annual Financial Report of the Company for the year ended 30 April 2026. All page numbers below refer to the Annual Financial Report which will be made available on the Company’s website.
This announcement contains regulated information.
• Transformed by the successful combination, Invesco Asia Dragon at £966m is now the largest trust in the AIC Asia Equity Income sector.
• Absolute NAV total return of +39.6% over the year to 30 April 2026. Share price total return of +44.7% as the discount narrowed to 7.2%. MSCI AC Asia ex Japan index up 45.7%, dominated by the stellar performance of the three largest constituents.
• The investment case for Asia and Invesco Asia Dragon remains strong. Our proposition has the lowest charges amongst peers, offers 4% dividend yield paid 1% quarterly and a rolling 3-year 100% unconditional tender at a 4% discount to NAV.
• Together, these provide a unique opportunity to invest in Asia’s future. Our aim is to offer an attractive investment case and a strong corporate proposition at the same time.
Financial Information and Performance Statistics
The benchmark index of the Company is the MSCI AC Asia ex Japan Index (total return, net of withholding tax, in sterling terms)
Total Return Statistics(1) with dividends reinvested
| Change for the year (%) | 2026 | 2025 |
| Net asset value (‘NAV’) total return(2) | 39.6 | 2.8 |
| Share price total return(2) | 44.7 | 7.1 |
| Benchmark index total return(3) | 45.7 | 3.9 |
Capital Statistics
| At 30 April | 2026 | 2025 | % change |
| Net assets (£’000) | 965,665 | 729,912 | +32.3 |
| NAV per share | 479.67p | 356.31p | +34.6 |
| Share price(1) | 445.00p | 320.00p | +39.1 |
| Benchmark index (capital) | 1,440.01 | 1,005.56 | +43.2 |
| Discount(2) per ordinary share: | (7.2)% | (10.2)% | |
| Average discount over the year(1)(2) | (8.5)% | (11.2)% | |
| Gearing(2): | |||
| – gross | 3.8% | 6.0% | |
| – net | 3.1% | 5.7% |
Revenue Statistics
| Year Ended 30 April | 2026 | 2025 | % change |
| Income (£’000) | 25,091 | 12,683 | +97.8 |
| Net revenue available for ordinary shares (£’000) | 19,980 | 10,040 | +99.0 |
| Revenue return per ordinary share | 9.83p | 10.67p | –7.9 |
| Dividends per share(4): | |||
| – first interim | 3.95p | 7.80p | |
| – second interim | 3.95p | 3.90p | |
| – third interim | 3.95p | 3.90p | |
| – final | 3.95p | – | |
| Total dividends | 15.80p | 15.60p | +1.3 |
| Ongoing charges ratio(2)(5) | 0.59% | 0.73% |
(1) Source: LSEG Data & Analytics.
(2) Alternative Performance Measure (‘APM’). See Glossary of Terms and Alternative Performance Measures on pages 88 and 89 of the financial report for details of the explanation and reconciliations of APMs.
(3) Index returns are shown on a total return basis, with dividends reinvested net of withholding taxes.
(4) Until January 2025, the Company’s dividend policy was to pay, in absence of unforeseen circumstances, 4% of the Company’s NAV in two equal instalments of 2% based on the NAV at last business day of September. This policy was updated in January 2025 to increase the frequency of dividend payments from a biannual to a quarterly basis at a rate of approximately 1% of the NAV. A further update occurred on 1 May 2025 when the date was set at the last business day of April for the NAV by reference to which the four quarterly payments of 1% would be calculated, commencing on 30 April 2025.
(5) Includes the effect of the remaining proportion of the management fee waiver agreed between the Company and the Manager following the combination with Asia Dragon Trust plc in February 2025 (see note 3 on page 69 for further details).
Chair’s Statement
Highlights
• Transformed by the successful combination, Invesco Asia Dragon at £966m is now the largest trust in the AIC Asia Equity Income sector.
• Absolute NAV total return of +39.6% over the year to 30 April 2026. Share price total return of +44.7% as the discount narrowed to 7.2%. MSCI AC Asia ex Japan index up 45.7%, dominated by the stellar performance of the three largest constituents.
• The investment case for Asia and Invesco Asia Dragon remains strong. Our proposition has the lowest charges amongst peers, offers 4% dividend yield paid 1% quarterly and a rolling 3-year 100% unconditional tender at a 4% discount to NAV.
• Together, these provide a unique opportunity to invest in Asia’s future. Our aim is to offer an attractive investment case and a strong corporate proposition at the same time.
When I became Chair in the summer of 2018 Invesco Asia Trust had net assets of around £230m and was a relatively small trust competing for attention in a crowded sector. Today, following the transformational combination with Asia Dragon Trust in February 2025, strong relative performance over the period has been capped off by a year of strong absolute returns and net assets stand at around £1 billion. This makes us the 244th largest listed company out of the 350 companies making up the FTSE-100 and FTSE-250 Indices. The journey from £230m to £1 billion has been rewarding for shareholders and a source of pride for the Board. Market conditions have been challenging but through the whole period Fiona Yang and Ian Hargreaves have continued to build an outstanding performance track record. And the Board has worked hard to construct a corporate proposition that we believe remains the most compelling in the investment trust sector. That work continues: We have been able to secure the lowest ongoing charges in both the Asia Pacific (ex Japan) or Asia Pacific (ex Japan) Equity Income AIC sectors, projected at approximately 0.70% going forward which makes us one of the lowest cost ways of investing in Asia. We offer an enhanced dividend yielding approximately 4% of NAV, 1% paid quarterly, funded from a combination of revenue and distributable reserves. So while your capital remains invested in a portfolio of Asia’s most promising businesses, you also receive a regular income to enhance your return.
Shareholders also benefit from a rolling three-yearly unconditional tender offer through which they can redeem if they wish up to 100% of their holding at a 4% discount to NAV, with the first opportunity in 2028. We are encouraged that our corporate proposition is now attracting a much wider range of investors, both professional and private, than at any point in the Company’s history. Our aim is to offer an attractive investment case and a strong corporate proposition at the same time Asia hits the sweet spot.
Performance
The NAV total return performance over the year to 30 April 2026 was +39.6%. Your share price total return was +44.7% as the discount narrowed to 7.2%. Both were behind the Index total return of +45.7%. Fiona and Ian discuss performance in more detail in their Manager’s Report. Performance attribution shows that stock selection in China and an underweight position in the technology sector that developed later in the year were the main causes of the underperformance. It should be noted that the MSCI AC Asia ex Japan index is currently dominated by Taiwan Semiconductor Manufacturing (TSMC), Samsung Electronics and SK Hynix. These three stocks at the end of April accounted for 27% of the whole index and were up by 139%, 149% and 274% respectively over the year, making it a very difficult year to beat the index. Our longer term performance remains excellent with very good performance over 5 and 10 years especially when risk-adjusted. Our strong risk-adjusted performance was one of the key reasons our trust was selected by Asia Dragon for combination. I want to reiterate here our congratulations to Fiona Yang who was this year recognised by Morningstar as one of the top female fund managers in the UK.
While outsized returns in a small number of AI-related stocks have generated most of the index return, other stocks have not moved so much. The AI dominance of TSMC, Samsung Electronics and SK Hynix is reminiscent of the Technology, Media and Telecom bubble in 1999-2000. Fiona and Ian’s distinctive investment style leads them to move early so a momentum driven market, such as we are experiencing right now, is their most difficult headwind. Rather than chasing headlines or following the crowd, Fiona and Ian look for well-run businesses whose share prices have not yet caught up with their true potential – and invest before the wider market recognises the opportunity. This disciplined, forward-looking style has delivered us much sought after consistency in our long-term results.
Annualised Total Return in Sterling Terms to 30 April 2026(1)(2)
| 1 | 3 | 5 | 10 | |
| year | years | years | years | |
| Net Asset Value %(3) | 39.6 | 13.8 | 6.8 | 12.2 |
| Share Price %(3) | 44.7 | 16.5 | 7.6 | 13.4 |
| Benchmark % | 45.7 | 17.8 | 6.0 | 10.8 |
(1) Source: LSEG Data & Analytics.
(2) The benchmark index of the Company is the MSCI AC Asia ex Japan Index (total return, net of withholding tax, in sterling terms).
(3) Alternative Performance Measure (‘APM’). See Glossary of Terms and Alternative Performance Measures on pages 88 and 89 of the financial report for details of the explanation and reconciliations of APMs.
My 30 years’ experience of managing money taught me that it is far better to move early than late but that it is painful when the momentum carries on after you have moved. Patience is in order, their valuation discipline and sound processes should serve shareholders well as conditions normalise. Meanwhile a +40% total return in a severe style headwind isn’t bad.
Personnel Changes
As announced last year, I will retire from the Board at the end of the September 2026 AGM having completed nine years of service. Vanessa Donegan, will become the new Chair and Susan Sternglass Noble will take over as Senior Independent Director from Vanessa. Vanessa will provide strong leadership to guide the company through its next phase. James Will also retires from the Board at the end of the September 2026 AGM after approaching nine years of service. We extend our thanks and appreciation to James, the former Asia Dragon Chair, whose expertise and leadership have been invaluable to the Company.
Also, I am pleased to announce that from 1 August 2026 we are appointing Marc Ye as a third co-manager for the Company. Fiona and Ian will retain their roles as lead and senior co-manager respectively. Invesco are keen to commit additional investment talent and resources to this Company so this is all about strengthening and deepening the team for the compelling opportunities that the Board sees ahead. Marc has been a longstanding member of the Invesco team, with deep experience across Asian equities and a thorough understanding of the investment philosophy and process that underpin the strategy.
Come and Meet Us
As the September AGM is my last as Chair and as the AGM is your opportunity to meet the board and fund managers face to face, hear a presentation on the portfolio and ask questions, I encourage you to attend this year. Shareholders may bring a guest. If you cannot attend in person, a recording will be available on the Company’s website.
Education Hub
If you want to deepen your understanding of investment trusts, the Invesco Investment Trust Education Hub has a growing library of articles written specifically with private investors in mind explaining complexities in plain English and we think you will find the investment trust story a surprisingly compelling one. You are welcome to explore our hub at any time and recommend it to others. The Education Hub will be live later this summer, and we look forward to sharing it with you soon.https://www.invesco.com/uk/en/investment-trusts.html.
Update
Since 30 April 2026, the NAV total return has been 6.4%, outperforming the index return of 4.3%. The share price has returned 8.2% with the discount narrowing to 5.7%.
Outlook
The outlook remains positive for strong corporate earnings growth across many markets led by Taiwan and South Korea and with Asia Pacific equities continuing to trade at a meaningful valuation discount to US equities. China’s shifts in government policy during 2026, supporting deleveraging, encouraging domestic demand with funding programmes and monetary easing have contributed to improvements in corporate earnings expectations in China and broader Asian equities. Improved US-China relations after two Trump-Xi summits, even if it is still a work-in-progress, are a significant step forward from the US-China trade and tariff dispute dominating sentiment a year ago. If we really are about to experience a major long-term turning point in US-China relations then it would necessitate a major adjustment in investment thinking and positioning towards Asia.
We should also note the strengths of the Asian economies, particularly China growing its real GDP at +5.0%, Taiwan at +13.7%, India at +7.7% and South Korea at +3.6%. In India, the March quarter earnings season was better than expected, with many companies beating estimates, particularly in consumption-linked sectors. The result is that Indian equities today appear significantly less expensive than a year ago, even though index levels remain relatively high. While attention is understandably focused on the AI semiconductor supply chain in South Korea and Taiwan, there is much innovation going on in other sectors that is not yet appreciated, in China particularly.
Observing from the relatively stagnant UK and European standpoint it is all too easy to overlook what is happening in Asia. This is a compelling backdrop for long-term investors seeking both growth and diversification through Fiona and Ian’s carefully selected range of companies across Asia’s fastest-growing economies.
Final Thoughts
We have had positive feedback over the years from shareholders for our corporate proposition and the clarity with which it has been presented in previous Chair’s Statements. So I want to update you on our corporate proposition and also to make the case loud and clear for investment trusts in general. The next two pages are designed to do exactly that.
I have thoroughly enjoyed serving the Company over the past nine years and I thank you for your support. We are well-positioned for the future and I look forward to the Company’s next chapter of growth as a continuing shareholder.
Investment Trusts are both a Best-Kept Secret and a Great British Success Story
A plain-English guide to the case for investment trusts in general, how Invesco Asia Dragon stands out and why it matters for your money.
| INVESTMENT TRUSTS Investment trusts are both a best-kept secret and a great British success story. As an investment manager, I always knew that an investment trust should outperform its open-ended counterpart. Lower holding costs and the ability to gear make this almost a no-brainer. Yet somehow over the years, the story has been lost and despite their many advantages, they remain surprisingly underappreciated. This part of the Chair’s statement explains why investment trusts continue to matter, how Invesco Asia Dragon seeks to harness the strengths of the structure for shareholders, and why I believe the sector is well overdue a comeback. | INVESCO ASIA DRAGON |
| Investment trusts have stood the test of time Investment trusts are one of the UK's great financial success stories. For more than 150 years they have helped investors build wealth, generate income and access professional investment management. Investment trusts are not simply another type of fund, they are a fundamentally different ownership structure. Their combination of independent governance, permanent capital, shareholder rights and competitive costs gives them characteristics that few other investment vehicles can match. | Invesco Asia Dragon, founded in 1994 and significantly enlarged by its combination with Asia Dragon Trust in 2025, is now one of the largest Asian investment trusts available to UK investors. With net assets around £1bn and membership of the FTSE 250 Index, the Company is well positioned to serve shareholders for many years to come. |
| They have an independent board of directors One of the defining strengths of the investment trust structure is governance. Standards are high, as you would expect for a UK public listed company. Unlike many other investment vehicles, every investment trust has a board of directors whose responsibility is to shareholders rather than the investment manager. The Board oversees performance, monitors risk, negotiates fees, can change the investment manager and ensures that shareholders' interests remain paramount. | Invesco Asia Dragon’s board is fully independent of Invesco. Directors are appointed to serve a maximum of nine years. They are fully responsible to the shareholders and not at all to the manager. |
| Investment trusts typically have lower fees and charges Costs matter because every pound paid in charges is a pound that is no longer working for shareholders. Over long periods, even modest differences in charges can make a meaningful difference to shareholder outcomes, so they should be considered carefully alongside performance, service, governance and the wider benefits of the structure. Boards are responsible for managing the level of charges borne by shareholders and for overseeing the various third-party supplier relationships. “Ongoing charges” is the term used to capture the annual costs of holding an investment, including the investment management fee, company secretarial fee, administration, marketing and custody. | The annual cost of holding Invesco Asia Dragon is approximately 0.70% of the value of your investment – currently the lowest of any comparable Asian investment trust. The costs and charges are structured in such a way that they reduce as a percentage as the company grows. |
| Investment trusts are better for income investors Investment trusts have flexibility with income distribution that many other investment vehicles do not possess. This is because the investment trust company structure means that they can use accumulated revenue reserves and capital reserves to both smooth and enhance dividend income to shareholders. Some trusts use revenue reserves to try to increase dividends every year. Others use capital reserves to pay an enhanced dividend, beyond what is normally available for investing in their particular asset class. The result? A regular, meaningful income while your capital stays invested and retains the opportunity to grow. | Invesco Asia Dragon's enhanced dividend policy seeks to provide shareholders with a distribution equivalent to approximately 4% of net asset value each year, paid in quarterly instalments. The objective is to provide a meaningful level of income while retaining exposure to the long-term capital growth opportunities available across Asia. |
| The closed-end structure is an advantage Like open-ended funds, investment trusts allow investors to access the expertise of professional investment managers and spread their risk rather than being tied to the fortunes of one or two individual stocks. Unlike open-ended funds, their closed-end structure allows them to more easily access illiquid or inaccessible markets and also allows investors to trade live when the stock market is open, rather than having to wait to invest or access your monies. This is particularly important for markets where there are restrictions on foreign investors such as Taiwan, South Korea and India. It also allows investment in smaller or illiquid companies without fear of being forced into selling by redemption pressures. Being a source of semi-permanent capital, investment trusts’ management contracts are valuable to the investment management companies. This is why they will often put forward their best fund managers as the managers of those contracts. | At the heart of Invesco Asia Dragon are its Co-Portfolio Managers, Fiona Yang and Ian Hargreaves – two of the most experienced Asia specialists in the UK investment industry. Their approach is distinctive: rather than chasing headlines or following the crowd, Fiona and Ian look for well-run businesses whose share prices have not yet caught up with their true potential – and invest before the wider market recognises the opportunity. This disciplined, forward-looking style has delivered strong long-term results for institutional investors such as pension funds and sovereign wealth funds. Invesco Asia Dragon is the only way for private investors in the UK to access their joint track record. |
| Gearing (borrowing) amplifies returns Investment trusts can borrow a modest amount to invest alongside shareholders’ capital – this is known as gearing. It works a bit like a mortgage on a property: borrowing can amplify your gains when markets rise, but it can also magnify losses if markets fall. The key is how it is used. Good managers treat gearing carefully and use it as a long-term tool – turning it up when they see compelling opportunities and dialling it back when they are more cautious. Over the long term, thanks to rising markets, this has been a clear advantage over open-ended funds in terms of performance. | The trust can borrow up to 25% of its value to invest when the managers spot particularly attractive opportunities. As at 30 April 2026, borrowing stood at a modest 3%. The managers dial it up when conviction is high and scale it back when caution is warranted. Used this way, gearing is a tool to enhance your long-term returns – not a source of unnecessary risk. |
| You have rights as a shareholder; you are not just a customer Investment trust shareholders are not merely customers. Because an investment trust is a listed company, you are a genuine owner with real rights. Your voice matters. You can attend the Annual General Meeting, vote on all the resolutions, meet and put questions to the board and fund managers and engage directly with the people looking after your money. It is a level of transparency and personal access that most other types of fund simply cannot match. For me this has been one of the highlights of being a director and I look forward to meeting as many of you as possible at my last meeting as Chair. | Come and meet us. The Annual General Meeting is your opportunity to meet the Board and fund managers face to face, hear a presentation on the portfolio, ask questions and stay for lunch. Shareholders may bring a guest to these meetings. If you cannot attend in person, a recording of the portfolio managers presentation will be available on the Company’s website. |
| Dealing costs need to be considered Although the annual cost of holding an investment trust on an investment platform is typically lower than an open-ended fund, the cost of the initial purchase and final sale is usually higher. There is a bid-offer spread for investment trusts whereas open-ended funds usually trade at a single price. Being shares listed on the stockmarket, investment trusts are liable to 0.5% stamp duty upon purchase. Platforms will also charge a small commission on purchases and sales, for example around £7 for a £10,000 purchase. For long-term investors, these dealing costs are soon outweighed by the benefits of lower ongoing costs and the structural advantages of the investment trust model. | We have no ability to mitigate the 0.5% stamp duty other than to lobby the government to abolish it. The larger an investment trust is, the lower will normally be the bid-offer spread when it comes to buying and selling shares. For Invesco Asia Dragon, the bid-offer spread is typically around 0.3%. Our larger size helps reduce the spread. These are one-off costs on buying and selling and are quickly offset by the savings on lower annual charges. |
| Liquidity is important Individual investors will very rarely have any issues with the liquidity (or the ability to deal in your chosen size) of investment trust shares. But institutional investors do have legitimate complaints. If they are dealing in size regularly, they may not be able to achieve the instant complete execution that an open-ended fund would provide. That certainty makes open-ended funds an easier option for wealth managers. It’s more of an issue when it comes to selling a position as if the selling volume outweighs the available liquidity, it can cause the discount to widen to the point where buyers accommodate the selling. To offset this some trusts have zero discount policies or an active buyback approach, others have unconditional tenders. | To give new buyers and existing holders certainty over their ability to exit if desired, we introduced in February 2025 a 100% Unconditional Tender which will occur every three years, the first one due in early 2028. This provides certainty that any shareholder if they wish will be able to sell up to 100% of their holding at a 4.0% discount to the prevailing NAV (debt at fair value, cum income). |
| Discounts are a problem if they widen and stay wide Most investment trust companies trade at a discount to their underlying net asset value. This is not a problem in itself. Most listed companies, whatever they do, will not trade exactly at their net asset value. The discount or premium reflects supply and demand for the company’s shares and, in the case of investment trusts, will be a function of historic performance, confidence in the asset class, the investment case set out by the trust’s manager and the corporate proposition set out by its board. Sometimes you can buy at a discount – effectively paying less than the assets are worth – which can be an opportunity. But discounts can also widen, which is less welcome for existing shareholders. A good investment trust will typically trade over time in a range from a single-figure discount to a small premium. Persistent double-digit discounts are unpopular with shareholders and have attracted justified criticism. Boards therefore regard discount management as an important responsibility. | The Company's unconditional tender mechanism provides a powerful and distinctive tool designed to support shareholder confidence and improve the overall attractiveness of the Company's shares. In addition we operate an active buyback policy when appropriate. |
| Scale matters One of the most frequent complaints about investment trusts is that they lack scale and are too small for some of the wealth managers and investment platforms to invest in, as they will be investing many millions of pounds. There are differing views about what the minimum size should be. Some say £250m, some say £500m, one or two say £1bn. And in many cases the smaller trusts are fulfilling a niche role without having any wealth manager holdings. Ongoing charges levels are a useful indicator here. Anything that is significantly more expensive than peers might be too small. | With Invesco Asia Dragon now at £966m net assets as at 30 April 2026, scale is not a problem at all. Indeed some of the largest wealth managers have increased and are still increasing their holdings in us. The growth in assets has the effect of reducing the costs borne by shareholders. Our projected ongoing charges level of 0.70% p.a. is the lowest of all the Asian investment trusts. |
The most shareholder-friendly investment vehicle available to UK retail investors
There is no perfect investment vehicle. But the reason investment trusts have survived and prospered for more than 150 years is because they remain highly effective. The structure aligns the interests of shareholders, directors and investment managers in a way that few alternatives can replicate. Their strengths outweigh their limitations. They are the most shareholder-friendly investment vehicle available to UK retail investors today. And I say that after working on them for 44 years and counting.
I strongly believe the success story will continue and I hope that those of us in the know will intensify our efforts to ensure investment trusts are no longer a best-kept secret.
Neil Rogan
Chair
21 July 2026
Portfolio Managers’ Report Q&A
Portfolio Manager
Fiona Yang is the lead Co-Portfolio Manager of Invesco Asia Dragon Trust plc from 1 May 2024 following her appointment as Co-Portfolio Manager in January 2022. She is a member of the Henley-based Asian & Emerging Markets Equities team, currently based in Singapore. Fiona started her career with Goldman Sachs in July 2012 and became a member of their Asian Equity sales team as a China product specialist. She joined Invesco in August 2017. Fiona also provides stock and sector research covering the wider Asia ex-Japan region with a focus on China H and A share markets.
Portfolio Manager
Ian Hargreaves is the Co-Portfolio Manager of Invesco Asia Dragon Trust plc and Co-Head of the Asian & Emerging Markets Equities team at Invesco which manages pan-Asian portfolios and covers the entire Asian region. He has led this team as Co-Head since 2018. He started his investment career with Invesco Asia Pacific in Hong Kong in 1994 as an investment analyst where he was responsible for coverage of Indonesia, South Korea and the Indian sub-continent, as well as managing several regional institutional client accounts. Ian returned to the UK to join Invesco’s Asian Equities team in 2005, working on the portfolio as part of the investment team. He was appointed as joint Portfolio Manager in 2011 and became the sole Portfolio Manager on 1 January 2015, up until the appointment of Fiona Yang as Co-Portfolio Manager in January 2022. Ian swapped roles with Fiona effective 1 May 2024 and they continue to work very closely together on the Company’s portfolio.
Q How has the company performed in the period under review?
A The Company’s net asset value grew by 39.6% (total return, in sterling terms) over the
12 months to 30 April 2026, which compares to the benchmark MSCI AC Asia ex Japan index return of 45.7%.
Asian equity markets delivered a very strong return over the period, shaking off uncertainty related to ‘Liberation Day’ tariffs and the war in Iran to comfortably outperform developed markets. Technology has been the key driver of performance for both the portfolio and the benchmark, with some incredible returns for manufacturers of memory semiconductors and passive components with exposure to the AI capital expenditure cycle. However, asset allocation has been a headwind for relative performance, particularly in April after the announcement of a ceasefire in the Middle East saw a strong pick-up in momentum for technology stocks in South Korea and Taiwan, an area of the market in which the portfolio had an underweight position.
While April’s underperformance is disappointing, it reflects disciplined positioning in a narrow, momentum- driven market rather than any change in our long-term investment approach. Our investment process has historically helped us navigate markets in similar environments and we are explicitly looking to avoid getting caught up in the ‘greed’ zone, where overexuberance rules.
Elsewhere, stock selection in the consumer discretionary, energy and materials sectors contributed positively, helping offset detractors in consumer staples, industrials and financials. At the country level, our underweight position in India continued to benefit relative performance, helping offset the impact of our exposure to Indonesia and stock selection in China which detracted. AI may be the prevailing narrative driving markets, but there are very decent potential returns on offer elsewhere, particularly in overlooked markets like Hong Kong/China, Australia and Indonesia.
Q What have been the biggest contributors to relative performance?
A Technology stocks were the biggest single contributors to performance, particularly overweight positions in Samsung Electronics and passive components manufacturer Yageo, while semiconductor design company MediaTek also added meaningful value. However, this was offset by the impact of not holding other large cap technology names that outperformed, like SK Hynix and Delta Electronics.
Elsewhere in Korea, Samsung E&A has enjoyed a strong run on the back of Samsung Electronics’ capex plans and post-war rebuilding opportunities in the Middle East. Materials stocks Anglo American and Valterra Platinum contributed strongly, benefitting from higher metals prices, while our off-benchmark position in Australian oil & gas major Woodside Energy added notable value as the oil price broke higher.
Finally, selected Chinese consumer discretionary stocks added value. Auto-parts manufacturer MINTH re-rated as it looks to grow into new markets like AI data centre cooling and humanoid robotics, while hotel operator H World outperformed as earnings consistently beat expectations thanks to improving supply-demand dynamics in the hotel sector and the benefits of a structural shift to an asset-light model and a compelling capital return programme.
Q And detractors?
A Although being underweight India supported relative performance, holdings in private banks detracted given macro headwinds, with HDFC Bank amongst the biggest detractors following the unexpected resignation of its chair. Indonesian banks and United Overseas Bank in Singapore also underperformed.
Stock selection in industrials detracted. Full Truck Alliance saw earnings momentum soften, although we believe that the Chinese digital freight platform remains in good shape with potential to grow orders and the take rate in medium term. Meanwhile, Grab has underperformed amidst concerns about potentially reduced ride-hailing commissions in Indonesia (mandated by the government), which the company should be able to mitigate by small increases in fees charged to customers.
Another theme evident in global markets has been a preference for companies with hard assets rather than intangibles, which are perceived to be more at risk from AI disruption. Software and IT services stocks have de-rated, as have game developers, and the portfolio’s holdings in EPAM Systems and Chinese gaming companies Tencent and NetEase all underperformed. We feel valuations in these areas reflect a far more pessimistic outlook than is likely.
Finally, Chinese consumer stocks have remained out of favour, with weak demand and confidence, and a sector-wide de-stocking cycle leading to pricing pressure, earnings downgrades and valuation de-rating.
Q What has driven the strong performance of technology stocks in Korea and Taiwan?
A US hyperscalers keep raising capex guidance to build more AI data centres. This overturned the market narrative at the start of the year, that capex was close to peaking given the perceived low return on investment. Demand for Asian technology products remains comfortably ahead of supply, both because new capacity is hard to add quickly, and because demand has continued to rise faster than expected.
Prices for data centre components such as memory semiconductors have risen sharply, driving significant upgrades to earnings expectations. For example, consensus forecasts for Samsung Electronics’ 2027 profit have tripled since the start of 2026, with net profit now expected to exceed Apple’s in both 2026 and 2027. In that sense, the strong share price performance is supported by real profits and cash flows.
However, the sustainability of those profits is less certain, and the valuations being placed on them may be too high. Korea and Taiwan are both trading on trailing price-to-book valuations more than 4 standard deviations above their 10-year averages, an unusually stretched level by historical standards. The technology sector is also trading at around twice its long-run average price-to-book multiple.
It is important to remember that these are cyclical businesses, and periods of unusually strong profitability do not tend to last indefinitely. That is why we remain disciplined at current valuations, focusing on companies where the balance of risk and reward looks more attractive for long-term investors.
Q After such a strong run in Asian technology, what should investors watch out for?
A First, demand could fall short of elevated expectations, particularly if one or two hyperscalers were to scale back data-centre spending. That could happen if major customers such as OpenAI ran short of funding, or if shareholders became less willing to support capex on this scale. Given the size of current investment and the short lives of these assets, our analysis suggests it may be difficult to earn adequate returns on capital.
Demand could also prove to be illusory. In previous component bull markets, customers have often over-ordered for fear of missing out on supply. That can create a misleading picture of end demand and encourage too much new capacity.
AI capex is not macro proof. Higher energy prices act as a tax on growth and margins across the wider economy. While hyperscalers are large and unusual businesses, the revenues supporting AI investment still depend on cyclical end markets such as advertising, consumer spending and corporate IT budgets, which have historically softened when energy prices rise and growth slows.
Finally, supply could grow quickly, leading to more competition and lower profitability for Asian technology companies. Memory chips are a good example. At the start of this upcycle, shortages were confined to high-bandwidth memory, but they have now spread to commodity memory as well. Chinese producers have already shown they can make commodity memory and are unlikely to hesitate in expanding capacity. One constant in memory is that it is always cyclical: supply and demand rarely match, and any imbalance tends to show up quickly in prices.
Many areas of Asian technology are highly cyclical, which is why we are careful not to extrapolate unusually strong conditions too far into the future. Instead, we remain focused on building a diversified portfolio of attractively valued businesses, so that investors are not reliant on one narrow part of the market to generate returns.
Q On elevated energy prices, what are your views on current geopolitical risks?
A Conflict in the Middle East has brought geopolitical risks into sharper focus, particularly concerns around restricted trade flows through the Strait of Hormuz and the implications for energy markets, inflation and interest rates, with potential knock-on effects for global supply chains. While a wide range of outcomes is possible, the team remains focused on maintaining a well-balanced and diversified portfolio of companies trading at sensible valuations with strong balance sheets. No one can be certain how the conflict will evolve from here, how long disruptions persist, or which narrative dominates next, but we can assess what we are paying for a business, how much cash it generates, and how resilient it is across a range of outcomes. As a result, we believe the risks within the portfolio are manageable and that the company is well positioned to withstand this period of uncertainty, with volatility often presenting attractive opportunities.
Q Are there any other changes to positioning worth flagging?
A We started the year gradually taking profits from materials and semiconductor stocks, which led markets higher in 2025. This increased the portfolio’s underweight position in technology and moved us from being overweight to underweight in South Korea, as valuations became less supportive. Other outperformers sold include the likes of ENN Energy, Naver and MINTH.
In turn, we added to our energy exposure, specifically Woodside Energy, which seemed counterintuitive at the time given we were in an environment of oversupply, but beyond diversification benefits, valuations were compelling and the lack of investment in recent years was inviting for us as contrarians and proponents of capital cycle investing. The speed with which the oil market moved from glut to tight supply in March 2026 serves as a reminder of how quickly narratives can change.
Another area of the market that underperformed in 2025 was ‘quality’. As a factor, the definition of quality is open to debate, and we tend not to think in these terms, but most of the new ideas we are finding would have been categorised as ‘quality’ a few years ago. Ideas span consumer staples, healthcare, IT services and leisure industries. As an example, New Oriental Education (China’s leading online education services provider) now trades on the same price earnings ratio (13X) as China Shenhua (China’s largest coal miner).
Q Where else do you have conviction?
A Some of the most interesting ideas are absent from today’s headlines. Chinese consumer-related stocks are one example: confidence remains depressed and valuations reflect a bleak outlook, leaving plenty of room for upside even under modest recovery scenarios.
Stocks like China Resources Beer, game developer NetEase and e-commerce platform PDD are trading on comparable if not lower multiples of expected earnings than China Shenhua Energy, a coal miner. Meanwhile, any improvement in sentiment towards Indonesia would be clearly positive for our holdings there, although the position remains resolutely contrarian in the current environment.
Our holdings in both China and Indonesia offer very high shareholder return yields. Indonesian banks currently offer double digit dividend yields, with Astra International and Telkom Indonesia’s high single digit yields combining with share buybacks. Combined with their strong balance sheets, we believe these stocks offer significant upside, or meaningful downside protection, if market leadership begins to broaden.
When we look back on this period in two or three years’ time, we may find that some of today’s best opportunities were the stocks the market had placed in the “AI loser” or “AI uncertain” bucket. Uncertainty often creates opportunity because nervous investors are inclined to sell first and ask questions later.
Large parts of the market now fall into these categories, from the obvious, such as IT services companies that are still not seeing meaningful earnings declines, to the less obvious, such as internet gaming companies like our long-term favourite, NetEase. We believe the market is now showing capitulation in both directions: investors feel they need exposure to AI winners, and to fund that exposure they are selling almost anything that does not clearly fit that category.
Q Any final thoughts?
A The portfolio has delivered strong absolute returns over the period, even though performance has lagged the benchmark in a narrow, momentum-driven market. Asia is a diverse and fast-changing region, and our approach is designed to capture attractive long-term opportunities. Our conviction in the opportunity set remains high, and we continue to focus on building a diversified portfolio of resilient, attractively valued businesses that can compound value over time.
Fiona Yang & Ian Hargreaves
Portfolio Managers
21 July 2026
Investments in Order of Valuation
at 30 April 2026
Ordinary shares unless stated otherwise
† The sector group is based on MSCI and Standard & Poor’s Global Industry Classification Standard.
| Market | ||||
| Value | % of | |||
| Company | Sector† | Country | £’000 | Portfolio |
| Taiwan Semiconductor Manufacturing | Semiconductors and Semiconductor Equipment | Taiwan | 146,576 | 14.6 |
| Samsung Electronics | Technology Hardware and Equipment | South Korea | ||
| – preference shares | 55,328 | 5.5 | ||
| – ordinary shares | 31,027 | 3.1 | ||
| 86,355 | 8.6 | |||
| TencentR | Media and Entertainment | China | 62,331 | 6.2 |
| AIA | Insurance | Hong Kong | 32,617 | 3.3 |
| NetEaseR | Media and Entertainment | China | 31,617 | 3.2 |
| KasikornbankF | Banks | Thailand | 28,412 | 2.8 |
| AlibabaR | Consumer Discretionary Distribution and Retail | China | 27,016 | 2.7 |
| HDFC Bank | Banks | India | 26,847 | 2.7 |
| MediaTek | Semiconductors and Semiconductor Equipment | Taiwan | 25,425 | 2.5 |
| China Resources Beer | Food, Beverage and Tobacco | Hong Kong | 22,985 | 2.3 |
| Top Ten Holdings | 490,181 | 48.9 | ||
| H WorldR | Consumer Services | China | ||
| – ADR | 16,017 | 1.6 | ||
| – ordinary shares | 5,892 | 0.6 | ||
| 21,909 | 2.2 | |||
| United Overseas Bank | Banks | Singapore | 21,847 | 2.2 |
| Woodside Energy | Energy | Australia | 21,561 | 2.2 |
| ICICI | Banks | India | ||
| – ADR | 16,675 | 1.6 | ||
| – ordinary shares | 4,561 | 0.5 | ||
| 21,236 | 2.1 | |||
| Hon Hai Precision Industry | Technology Hardware and Equipment | Taiwan | 20,680 | 2.1 |
| Full Truck Alliance – ADS | Transportation | China | 20,331 | 2.0 |
| Samsung Fire & Marine | Insurance | South Korea | 18,949 | 1.9 |
| CK Asset | Real Estate Management and Development | Hong Kong | 18,660 | 1.9 |
| Yageo | Technology Hardware and Equipment | Taiwan | 17,946 | 1.8 |
| Grab | Transportation | Singapore | 16,496 | 1.6 |
| Top Twenty Holdings | 689,796 | 68.9 | ||
| Anglo American | Materials | United Kingdom | 16,053 | 1.6 |
| Shriram Finance | Financial Services | India | 14,779 | 1.5 |
| PDD Holdings – ADS | Consumer Discretionary Distribution and Retail | Ireland | 14,622 | 1.5 |
| YiliA | Food, Beverage and Tobacco | China | 14,538 | 1.4 |
| Hyundai Mobis | Automobiles and Components | South Korea | 13,774 | 1.4 |
| Largan Precision | Technology Hardware and Equipment | Taiwan | 13,416 | 1.3 |
| Sands China | Consumer Services | Hong Kong | 13,273 | 1.3 |
| Astra International | Capital Goods | Indonesia | 13,206 | 1.3 |
| New Oriental | Consumer Services | China | 12,553 | 1.3 |
| Bank Rakyat | Banks | Indonesia | 11,577 | 1.2 |
| Top Thirty Holdings | 827,587 | 82.7 | ||
| Samsung E&A | Capital Goods | South Korea | 10,794 | 1.1 |
| Link REIT | Equity Real Estate Investment Trusts (REITs) | Hong Kong | 10,427 | 1.0 |
| Delhivery | Transportation | India | 10,279 | 1.0 |
| JD.comR | Consumer Discretionary Distribution and Retail | China | 10,243 | 1.0 |
| CSL | Pharmaceuticals | Australia | 8,574 | 0.9 |
| WuliangyeA | Food, Beverage and Tobacco | China | 8,451 | 0.8 |
| Vinamilk | Food, Beverage and Tobacco | Vietnam | 7,973 | 0.8 |
| EPAM Systems | Software and Services | United States | 7,577 | 0.8 |
| Shenzhen Mindray Bio-MedicalA | Health Care Equipment and Services | China | 7,258 | 0.7 |
| Bangkok Dusit Medical ServicesF | Health Care Equipment and Services | Thailand | 7,205 | 0.7 |
| Top Forty Holdings | 916,368 | 91.5 | ||
| Hyundai Motor | Automobiles and Components | South Korea | 6,326 | 0.6 |
| – preference shares | ||||
| PT Bank Negara Indonesia | Banks | Indonesia | 6,211 | 0.6 |
| Persero | ||||
| KB Financial | Banks | South Korea | 5,981 | 0.6 |
| Power Grid | Utilities | India | 5,931 | 0.6 |
| Shenzhen TranssionA | Technology Hardware and Equipment | China | 5,863 | 0.6 |
| LG Chemical | Materials | South Korea | 5,820 | 0.6 |
| Dyno Nobel | Materials | Australia | 5,364 | 0.5 |
| Sany Heavy IndustryA | Capital Goods | China | 5,268 | 0.5 |
| Uni-President | Food, Beverage and Tobacco | Taiwan | 4,785 | 0.5 |
| Telkom Indonesia | Telecommunication Services | Indonesia | 4,514 | 0.5 |
| Top Fifty Holdings | 972,431 | 97.1 | ||
| Anhui Conch CementH | Materials | China | 4,389 | 0.4 |
| Invesco Liquidity Funds | Money Market Fund | Ireland | 4,097 | 0.4 |
| – US Dollar | ||||
| LG Household & Health Care | Household and Personal Products | South Korea | 3,660 | 0.4 |
| TingyiR | Food, Beverage and Tobacco | China | 3,131 | 0.3 |
| Worley | Capital Goods | Australia | 3,055 | 0.3 |
| Infosys – ADR | Software and Services | India | 2,691 | 0.3 |
| Semen Indonesia | Materials | Indonesia | 2,592 | 0.3 |
| Cognizant Technology Solutions | Software and Services | United States | 2,468 | 0.3 |
| Beijing Capital International | ||||
| AirportH | Transportation | China | 2,420 | 0.2 |
| China MeiDong AutoR | Consumer Discretionary Distribution and Retail | China | 465 | – |
| Total Holdings 60 (2025: 57) | 1,001,399 | 100.0 |
A: A-shares – shares that are denominated in Renminbi and traded on the Shanghai and Shenzhen stock exchanges.
ADR/ADS: American Depositary Receipts/Shares – are certificates that represent shares in the relevant stock and are issued by a US bank. They are denominated and pay dividends in US dollars.
F: F-Shares – shares issued by companies incorporated in Thailand that are available to foreign investors only. Thai laws have imposed restrictions on foreign ownership of Thai companies so there is a pre-determined limit of these shares. Voting rights are retained with these shares.
H: H-Shares – shares issued by companies incorporated in the People’s Republic of China (‘PRC’) and listed on the Hong Kong Stock Exchange.
R: Red Chip Holdings – holdings in companies incorporated outside the PRC, listed on the Hong Kong Stock Exchange, and controlled by PRC entities by way of direct or indirect shareholding and/or representation on the board.
Classification of Investments by Country/Sector
at 30 April
| 2026 | 2025 | |||
| Market Value | % of | Market Value | % of | |
| £’000 | Portfolio | £’000 | Portfolio | |
| Australia | ||||
| Capital Goods | 3,055 | 0.3 | – | – |
| Chemicals | – | – | 1,290 | 0.2 |
| Energy | 21,561 | 2.2 | 7,182 | 0.9 |
| Materials | 5,364 | 0.5 | – | – |
| Pharmaceuticals | 8,574 | 0.9 | – | – |
| 38,554 | 3.9 | 8,472 | 1.1 | |
| China | ||||
| Capital Goods | 5,268 | 0.5 | 6,634 | 0.9 |
| Consumer Discretionary Distribution and Retail | 37,724 | 3.7 | 41,451 | 5.3 |
| Consumer Services | 34,462 | 3.5 | 13,816 | 1.8 |
| Food, Beverage and Tobacco | 26,120 | 2.5 | 28,985 | 3.8 |
| Health Care Equipment and Services | 7,258 | 0.7 | 5,029 | 0.6 |
| Materials | 4,389 | 0.4 | – | – |
| Media and Entertainment | 93,948 | 9.4 | 89,476 | 11.5 |
| Technology Hardware and Equipment | 5,863 | 0.6 | 2,271 | 0.3 |
| Transportation | 22,751 | 2.2 | 21,520 | 2.8 |
| Utilities | – | – | 14,591 | 1.9 |
| 237,783 | 23.5 | 223,773 | 28.9 | |
| Hong Kong | ||||
| Automobiles and Components | – | – | 3,143 | 0.4 |
| Consumer Services | 13,273 | 1.3 | 11,385 | 1.5 |
| Equity Real Estate Investment Trusts (REITs) | 10,427 | 1.0 | 9,471 | 1.2 |
| Food, Beverage and Tobacco | 22,985 | 2.3 | 13,921 | 1.8 |
| Insurance | 32,617 | 3.3 | 29,375 | 3.8 |
| Real Estate Management and Development | 18,660 | 1.9 | 12,507 | 1.6 |
| 97,962 | 9.8 | 79,802 | 10.3 | |
| India | ||||
| Banks | 48,083 | 4.8 | 59,735 | 7.7 |
| Financial Services | 14,779 | 1.5 | 18,870 | 2.4 |
| Software and Services | 2,691 | 0.3 | – | – |
| Transportation | 10,279 | 1.0 | 7,679 | 1.0 |
| Utilities | 5,931 | 0.6 | 6,497 | 0.8 |
| 81,763 | 8.2 | 92,781 | 11.9 | |
| Indonesia | ||||
| Banks | 17,788 | 1.8 | 20,681 | 2.7 |
| Capital Goods | 13,206 | 1.3 | 10,976 | 1.4 |
| Materials | 2,592 | 0.3 | 3,607 | 0.5 |
| Telecommunication Services | 4,514 | 0.5 | 8,482 | 1.1 |
| 38,100 | 3.9 | 43,746 | 5.7 | |
| Ireland | ||||
| Consumer Discretionary Distribution and Retail | 14,622 | 1.5 | 6,587 | 0.9 |
| Money Market Fund | 4,097 | 0.4 | – | – |
| 18,719 | 1.9 | 6,587 | 0.9 | |
| Singapore | ||||
| Banks | 21,847 | 2.2 | 18,694 | 2.4 |
| Media and Entertainment | – | – | 2,341 | 0.3 |
| Transportation | 16,496 | 1.6 | 17,524 | 2.3 |
| 38,343 | 3.8 | 38,559 | 5.0 | |
| South Korea | ||||
| Automobiles and Components | 20,100 | 2.0 | 10,828 | 1.4 |
| Banks | 5,981 | 0.6 | 6,587 | 0.9 |
| Capital Goods | 10,794 | 1.1 | 6,025 | 0.8 |
| Household and Personal Products | 3,660 | 0.4 | 5,168 | 0.7 |
| Insurance | 18,949 | 1.9 | 13,725 | 1.8 |
| Materials | 5,820 | 0.6 | 5,814 | 0.7 |
| Media & Entertainment | – | – | 10,546 | 1.3 |
| Semiconductors & Semiconductor Equipment | – | – | 3,666 | 0.5 |
| Technology Hardware and Equipment | 86,355 | 8.6 | 47,204 | 6.1 |
| 151,659 | 15.2 | 109,563 | 14.2 | |
| Taiwan | ||||
| Food, Beverage and Tobacco | 4,785 | 0.5 | 5,365 | 0.7 |
| Semiconductors and Semiconductor Equipment | 172,001 | 17.1 | 81,451 | 10.6 |
| Technology Hardware and Equipment | 52,042 | 5.2 | 25,097 | 3.3 |
| 228,828 | 22.8 | 111,913 | 14.6 | |
| Thailand | ||||
| Banks | 28,412 | 2.8 | 28,507 | 3.7 |
| Health Care Equipment and Services | 7,205 | 0.7 | – | – |
| 35,617 | 3.5 | 28,507 | 3.7 | |
| United Kingdom | ||||
| Materials | 16,053 | 1.6 | 15,399 | 2.0 |
| 16,053 | 1.6 | 15,399 | 2.0 | |
| United States | ||||
| Software and Services | 10,045 | 1.1 | 5,332 | 0.7 |
| 10,045 | 1.1 | 5,332 | 0.7 | |
| Vietnam | ||||
| Food, Beverage and Tobacco | 7,973 | 0.8 | 7,795 | 1.0 |
| 7,973 | 0.8 | 7,795 | 1.0 | |
| Total | 1,001,399 | 100.0 | 772,229 | 100.0 |
Sector over/underweights (%)
As at 30 April 2026
| Company | Index | Active | |
| Consumer Staples | 6.54 | 2.43 | 4.11 |
| Communication | |||
| Services | 9.83 | 6.91 | 2.92 |
| Consumer | |||
| Discretionary | 12.00 | 10.21 | 1.79 |
| Financials | 19.23 | 17.72 | 1.51 |
| Real Estate | 2.91 | 1.67 | 1.24 |
| Materials | 3.42 | 3.61 | –0.19 |
| Industrials | 8.17 | 8.57 | –0.40 |
| Energy | 2.15 | 2.60 | –0.45 |
| Health Care | 2.30 | 2.89 | –0.59 |
| Utilities | 0.59 | 1.91 | –1.32 |
| Information | |||
| Technology | 32.86 | 41.48 | -8.62 |
Company 12 month Country weighting change
As at 30 April 2026
| Company | Index | Active | |
| Australia | 3.85 | 0.00 | 3.85 |
| China & Hong Kong | 33.53 | 30.10 | 3.43 |
| Indonesia | 3.81 | 0.82 | 2.99 |
| Thailand | 3.56 | 1.16 | 2.40 |
| Ireland | 1.87 | 0.00 | 1.87 |
| United Kingdom | 1.60 | 0.00 | 1.60 |
| Vietnam | 0.80 | 0.00 | 0.80 |
| United States | 1.00 | 0.20 | 0.80 |
| Singapore | 3.83 | 3.28 | 0.55 |
| Macau | 0.00 | 0.13 | –0.13 |
| Philippines | 0.00 | 0.34 | –0.34 |
| Malaysia | 0.00 | 1.26 | –1.26 |
| Taiwan | 22.85 | 28.05 | –5.20 |
| India | 8.16 | 13.51 | –5.35 |
| South Korea | 15.14 | 21.15 | –6.01 |
Business Review
Purpose, Business Model and Strategy
Invesco Asia Dragon Trust plc is an investment company and its investment objective is set out below. The strategy the Board follows to achieve that objective is to set investment policy and risk guidelines, together with investment limits, and to monitor how they are applied. These have been approved by shareholders.
The Company’s purpose is to provide shareholders with long-term capital growth and income by investing in a diversified portfolio of Asian and Australasian companies. The business model the Company has adopted to achieve its investment objective has been to contract out investment management and administration to appropriate external service providers, which are overseen by the Board. The principal service provider is Invesco Fund Managers Limited, which throughout this report is referred to as ‘the Manager’. Invesco Asset Management Limited, an associate company of the Manager, manages the Company’s investments and acts as Company Secretary under delegated authority from the Manager.
The Manager provides company secretarial, marketing and general administration services including accounting and manages the portfolio in accordance with the Board’s strategy.
Fiona Yang and Ian Hargreaves are the Co-Portfolio Managers responsible for the day-to-day management of the portfolio.
The Company also has contractual arrangements with MUFG Corporate Markets to act as registrar and the Bank of New York Mellon (International) Limited (‘BNYMIL’) as depositary and custodian.
Investment Objective
The Company’s objective is to provide long-term capital growth and income by investing in a diversified portfolio of Asian and Australasian companies. The Company aims to achieve growth in its net asset value (‘NAV’) total return in excess of the Benchmark Index, the MSCI AC Asia ex Japan Index (total return, net of withholding tax, in sterling terms).
Investment Policy
The Company invests primarily in the equity securities of companies listed on the stock markets of Asia (ex Japan) including Australasia. It may also invest in unquoted securities up to 10% of the value of the Company’s gross assets, and in warrants and options when it is considered the most economical means of achieving exposure to an asset.
The Company is actively managed and the Manager has broad discretion to invest the Company’s assets to achieve its investment objective. The Manager seeks to ensure that the portfolio is appropriately diversified having regard to individual stock weightings and the geographic and sector composition of the portfolio.
Investment Limits
The Board has prescribed limits on the investment policy, including:
– exposure to any one company may not exceed 15% of total assets;
– exposure to group-related companies may not exceed 15% of total assets;
– the Company may not invest more than 10% of total assets in other investment companies or investment trusts which are listed on the Official List;
– the Company may not invest more than 10% in aggregate in unquoted investments;
– the Company may invest in warrants and options up to a maximum of 10% of total assets. Apart from these and currency hedges, other derivative instruments are not permitted; and
– the Company may use borrowings up to 25% of net assets.
With the exception of borrowings in foreign currency, the Company does not normally hedge its currency positions but may do so if considered appropriate.
All the above limits are applied at the time of acquisition, except gearing which is monitored on a daily basis.
Borrowing and Debt
The Company’s borrowing policy is determined by the Board. The level of borrowing may be varied in accordance with the Portfolio Managers’ assessment of risk and reward, subject to the overall limit of 25% of net assets and the availability of suitable finance. In normal market conditions, the level of borrowing is expected generally to be no more than 15% of net assets.
Performance and Key Performance Indicators
The Board reviews performance by reference to a number of Key Performance Indicators which include the following:
• the NAV and share price;
• peer group performance;
• discount;
• dividend; and
• ongoing charges ratio.
A chart showing the total return NAV and share price performance compared to the Company’s benchmark index can be found on page 6.
Peer group performance is monitored in relation to five investment trusts in the Asia Pacific Equity Income sector and four investment trust companies in the Asia Pacific sector that in the opinion of the Board form the nine companies in the bespoke peer group of the Company. These are trusts that invest for growth and income in the Asia excluding Japan sector, as these most closely match the Company’s investment objective and capital structure. As at 30 April 2026, in total return NAV terms the Company was ranked seventh over one year, seventh over three years and sixth over five years (Source: Association of Investment Companies).
The discount of the shares is monitored on a daily basis. During the year the shares traded at a discount to NAV in a range of 4.7% to 10.9% with an average discount of 8.5%. The graph below, plots the discount over the two years to 30 April 2026. At the year end, the discount to the NAV stood at 7.2%.
The Board considers it desirable that the Company’s shares do not trade at a significant discount to NAV and believes that, in normal market conditions, the shares should trade at a price which on average represents a discount not more than 10% of NAV on a cum ≠income basis. To enable the Board to take action to deal with any material overhang of shares in the market it seeks authority from shareholders annually to buy back shares. Shares may be repurchased when, in the opinion of the Board, the discount is wider than desired and shares are available in the market. The Board considers that the repurchase of shares at a discount will enhance net asset value for remaining shareholders and may also assist in addressing the imbalance between the supply of and demand for the Company’s shares and thereby reduce the scale and volatility of the discount at which the shares trade in relation to the underlying net asset value.
Discounts across the whole investment trust sector remain elevated. Although the average discount of the share price to net asset value was lower than the Board's tolerance at 8.5%, the Board undertook a buyback programme during the year and as at 30 April 2026, a total of 3,533,000 shares had been repurchased into treasury.
The ten year record for dividends can be found on page 6, and the ongoing charges ratio for the last two years on page 89.
Results and Dividend
For the year ended 30 April 2026 the NAV total return was 39.6% compared to the total return on the benchmark index of 45.7%. The Portfolio Managers’ Report on pages 12 to 14 reviews the results.
Prior to implementation of the combination with Asia Dragon Trust plc the dividend policy aimed to pay in two equal instalments in November and April in each year, in the absence of unforeseen circumstances, a regular aggregate annual dividend equal to approximately 4% of NAV, calculated by reference to the NAV on the last business day of September.
Following implementation of the combination the Company maintained its current policy of paying an aggregate annual dividend equal to approximately 4% of its NAV, but increased the frequency of its dividend payments to a quarterly basis (i.e. approximately 1% every three months), with payments to be made in January, April, July and October of each year.
In addition, and with effect from 1 May 2025, the date was set at the last business day of April for the NAV by reference to which the four quarterly payments of 1% would be calculated, commencing on 30 April 2025. Dividends can be paid from a combination of the Company’s revenues, revenue reserves and capital reserves as required. Shareholders should note that the dividend policy of paying dividends calculated as a percentage of NAV means that dividends could fall if the NAV falls. The Company has paid four interim dividends in respect of the financial year; a first interim dividend of 3.95p per ordinary share was paid on 25 July 2025 to shareholders on the register on 11 July 2025. The second interim dividend of 3.95p per ordinary share was paid on 24 October 2025 to shareholders on the register on 3 October 2025. The third interim dividend of 3.95p per ordinary share was paid on 16 January 2026 to shareholders on the register on 19 December 2025. The fourth interim dividend of 3.95p per ordinary share was paid on 27 April 2026 to shareholders on the register on 7 April 2026. This gives a dividend yield of 3.6%, based on share price at year end.
The Board recently announced a total dividend of 19.20p for the forthcoming year, representing 4% of 30 April 2026 NAV, payable in 1% quarterly instalments.
Whilst the quarterly interim dividends are not subject to a resolution at the forthcoming AGM, a resolution to approve the Company’s dividend payment policy will be put to shareholders at the AGM on 15 September 2026.
Financial Position and Borrowing
The Company’s balance sheet on page 65 shows the assets and liabilities at the year end. Details of the Company’s bank facility are shown in note 11 to the financial statements, with interest paid (finance costs) shown in note 5.
Outlook, including the Future of the Company
The main trends and factors likely to affect the future development, performance and position of the Company’s business can be found in the Portfolio Managers’ Report of this Strategic Report. Further details of the principal risks affecting the Company are set out in the section: ‘Principal and Emerging Risks and Uncertainties’ on pages 28 to 32.
Investment Process
At the core of the Manager’s philosophy is a belief in active investment management. Fundamental principles drive an active investment approach, which aims to deliver attractive total returns over the long term. The investment process emphasises pragmatism and flexibility, active management, a focus on valuation and the combination of top-down and bottom-up fundamental analysis. Bottom-up analysis forms the basis of the investment process. It is the key driver of stock selection and is expected to be the main contributor to alpha generation within the portfolio. Portfolio construction at sector level is largely determined by this bottom-up process but is also influenced by top-down macroeconomic views.
Research provides a detailed understanding of a company’s key historical and future business drivers, such as demand for its products, pricing power, market share trends, cash flow and management strategy. This allows the Manager to form an opinion on a company’s competitive position, its strategic advantages/disadvantages and the quality of its management. The team has contact with several hundred companies during each year. The portfolio management team travel to the region 3-4 times per year. The Manager will also use valuation models selectively in order to understand the assumptions that brokers/analysts have incorporated into their valuation conclusions and as a structure into which the Manager can input its own scenarios.
Risk management is an integral part of the investment management process. Core to the process is that risks taken are not incidental but are understood and taken with conviction. The Manager controls stock-specific risk effectively by ensuring that the portfolio is appropriately diversified.
Also, in-depth and constant fundamental analysis of the portfolio’s holdings provides the Manager with a thorough understanding of the individual stock risk taken. The Manager’s internal Performance & Risk Team, an independent team, ensures that the Portfolio Managers adhere to the portfolio’s investment objectives, guidelines and parameters. There is also a culture of challenge and debate within the portfolio management team regarding portfolio construction and risk.
The Manager considers ESG and climate related risks as part of the overall investment process. Further details on this aspect of the process is discussed on pages 15 and 18.
Internal Control and Risk Management
The Directors have overall responsibility for the risk control framework and are responsible for reviewing the effectiveness of these controls. This includes safeguarding the Company’s assets. The following describes how the Directors have carried out a robust assessment of the principal and emerging risks facing the Company, including those that would threaten its business model, future performance, solvency or liquidity.
The Audit Committee (the ‘Committee’), on behalf of the Board, has established an ongoing process for identifying and undertaking a rigorous assessment of current and emerging risks to which the Company is exposed. This assessment references a risk control summary, which maps the risks, mitigating controls in place, and monitoring and reporting of relevant information.
As part of the process, the Committee has categorised into four categories: strategic; investment management; third party service providers; and regulation and corporate governance. An explanation of these categories follows.
Strategic Risk
The Board sets the strategy including objectives of the Company and how these should be achieved. The Board assesses the performance of the Company in the context of the market and macro-economic issues, and gives direction, while monitoring the Manager and other third parties for the actions they take on behalf of the Company.
Investment Management Risk
Investment management covers management of the portfolio together with cash management, gearing and hedging i.e. the items which the Portfolio Managers have control of, and which generate the Company’s performance.
Third Party Service Providers Risk
The Company has no employees and its Directors are appointed on a non-executive basis. The Company is reliant on Third Party Service Providers (‘TPP’) for its executive functions. The Company’s most significant TPP is the Manager – to which portfolio management, company secretarial and administrative services are delegated. Other significant TPPs are the broker, depositary, custodian and registrar.
Regulation and Corporate Governance Risk
The regulations with which the Company is required to comply include the provisions of the Companies Act 2006, the UK Listing Rules, the Alternative Investment Fund Managers Directive, the Market Abuse Regulation, the Financial Conduct Authority’s (‘FCA’) Disclosure Guidance and Transparency Rules, tax regulation as an investment trust, the UK Corporate Governance Code and Accounting Standards.
The residual risk ratings analysed in the Risk Control Matrix, enable the Directors to concentrate on those risks that are most significant and also forms the basis of the list of principal risks and uncertainties.
The Company’s oversight and its control environment is based on the Company’s relationship with its TPPs all of which have clearly defined lines of responsibility, delegated authority, and control procedures and systems. The Company uses the three lines of defence model, which is also embedded into the Manager’s risk management systems.
The effectiveness of the Company’s internal control and risk management system is reviewed at least annually by the Committee. The Committee has received satisfactory reports on the operations and systems of internal control of the Manager, custodian and registrar. Reports on the Manager encompassed all the areas the Manager is responsible for: investment management, company secretarial and general administration. The Committee also received a comprehensive and satisfactory report from the depositary at the year end Committee meeting.
Due diligence is undertaken and contracts considered before arrangements are entered into with any TPP. The Manager regularly reviews the arrangements with each of the TPPs including service standards, the performance of all TPPs through formal and informal meetings, and by reference to third party independently audited service organisation control reports. The results of the Manager’s reviews are reported to and reviewed by the Committee. These various reports did not identify any significant failings or weaknesses during the year and up to the date of this Annual Financial Report. If any had been identified, appropriate remedial action would have been taken. In particular the Board formally reviews the performance of the Manager annually and informally at every Board meeting. No significant failings or weaknesses were identified or occurred throughout the year ended 30 April 2026 and up to the date of this Annual Financial Report.
Reporting to the Board at each board meeting comprises, but is not limited to: financial reports, including any hedging and gearing; updates in relation to implementation of strategy; performance against the benchmark and the Company’s peer group; the Portfolio Managers’ review, including of the market, the portfolio, transactions and prospects; revenue forecasts; ESG; and investment monitoring against investment guidelines. The Portfolio Managers are permitted discretion within these guidelines, which are set by the Board. Compliance with the guidelines is monitored daily. Any proposed variation to these guidelines is referred to the Board.
Principal and Emerging Risks and Uncertainties
With the support of the Manager, the Audit Committee maintains a detailed risk control summary matrix that identifies the principal risks and uncertainties to which the Company is exposed, along with strategies to mitigate them as effectively as possible. Principal risks are defined as those risks where the combination of probability and impact is most significant and could seriously affect the Company’s performance, future prospects or reputation. The Directors have evaluated the likelihood and perceived impact of each risk after implementing mitigating actions. They then determine the acceptability of the residual risk, which defines the Board’s risk appetite.
The Board conducted a thorough review of the risks which could impact the Company’s sustainable success. This exercise involved reassessing the Company’s principal and emerging risks in light of current global impacts, reviewing whether the existing risks continue to apply to the Company, and considering whether any new or additional risks should be recognised. Having undertaken this assessment, the Board concluded that the current risks remained the most significant to the Company.
The necessary actions to mitigate their potential impact were also considered as part of this review. As a result, the risk control summary was revised accordingly, with changes applied to the wording of identified risks and their corresponding mitigating factors to reflect prevailing global conditions.
Given this review, the Directors affirm that they have conducted a robust assessment of the principal and emerging risks facing the Company, including those that could jeopardise its business model, future performance, solvency, or liquidity.
In addressing other risks, the Board aims to balance the potential impact and likelihood of each risk with its capacity and willingness to control and mitigate the risk to an acceptable level.
Risk trend:
Increased
Unchanged
Decreased
| Risk & Impact | Controls & Mitigation | Trend |
| During | ||
| Year | ||
| Strategic Risk | ||
| Geopolitical Risk This encompasses the potential for political, socio-economic, and cultural developments to adversely impact the value of the Company’s assets. The escalation of geopolitical tensions globally presents a growing risk to market stability and the overall investment landscape. The Company remains exposed to these uncertainties, particularly in relation to concerns surrounding global economic growth, rising political volatility, and the increased risk of protectionist measures, including tariffs on exported goods. Concerns around restricted trade flows through the Strait of Hormuz and the implications for energy markets, inflation and global supply chains have brought geopolitical risks into sharper focus. China specific: Investing in China involves exposure to country-specific geopolitical risks, including potential policy shifts and regulatory actions by the Chinese government. These may include changes in domestic legislation or the escalation of international tensions, either of which could prompt investors to reduce or withdraw capital from the region. Additionally, the implementation of new regulatory frameworks may lead to heightened governmental oversight and potential constraints on the mobility of assets. This includes, but is not limited to, American Depositary Receipts (ADRs), Variable Interest Entity (VIE) structures, and A-Shares, all of which may be subject to increased scrutiny or restriction. | The Manager evaluates and assesses political risk as part of the stock selection and asset allocation policy which is monitored at every Board meeting. This includes political, military and diplomatic events and changes to legislation. Balancing political risk and reward is an essential part of the active management process. The Manager maintains robust systems, experienced personnel, and established controls to monitor market conditions continuously and respond swiftly to periods of financial stress or crisis. Forward-looking scenario analysis and stress testing, covering a range of moderate to severe market conditions, are conducted to support the Board’s assessment and confirmation of the Company’s long-term viability. The Portfolio Managers incorporate Chinese macroeconomic data, market intelligence, and relevant political analysis into their Board reporting to support ongoing oversight and decision-making. | Unchanged |
| Strategic Risk | ||
| Market Risk Market risk refers to the potential for the Company’s investments to incur losses due to broad-based factors that impact the performance of financial markets as a whole, commonly known as systematic risk. The Company’s market risk exposure encompasses three primary components: equity market risk, currency risk, and interest rate risk. | While market risk is an inherent and unavoidable aspect of investing across global markets, it is actively monitored and managed through portfolio diversification, disciplined asset allocation, and ongoing dialogue with the Manager. The Manager integrates risk considerations into portfolio construction and investment strategy, aiming to mitigate the impact of adverse market movements. The Board receives regular updates from the Manager on market conditions and outlook and oversees the application of the Company’s policies on gearing and liquidity. Within agreed parameters, the Manager is granted discretion to manage cash and leverage levels, enabling responsive risk management aligned with prevailing market dynamics. The Board closely monitors the effectiveness of these measures and the investment process as a whole. The Company has a diversified investment portfolio by country, sector and stock. Due to its investment trust structure, no forced sales need to take place and investments can be held over a longer-term horizon. However, there are few ways to mitigate absolute market risk because it is engendered by factors which are outside the control of the Board and the Manager. These factors include the general health of the world economy, interest rates, inflation, government policies, industry conditions, and changing investor demand and sentiment. Such factors may give rise to high levels of volatility in the prices of investments held by the Company. Further details of the Company’s exposure to market risk (including equity market risk, currency risk and interest rate risk), liquidity risk and credit risk and how they are managed are contained in note 16 to the financial statements on pages 73 to 76. | Unchanged |
| Strategic Risk | ||
| Share Price Discount to NAV The Company’s shares may trade at a persistent discount to Net Asset Value (NAV), and the absolute level or volatility of this deviation may negatively impact shareholder value and such factors may give rise to high levels of volatility in the prices of investments held by the Company. Furthermore, a prolonged and significant discount to NAV may attract the attention of activist investors, potentially leading to strategic or structural pressures on the Company. | The Board receives regular reports from both the Manager and the Company’s broker on the Company’s share price performance, level of share price discount to NAV and recent trading activity in the Company’s shares. As a result of the implementation of the combination, the Board has also strengthened the Company’s Corporate Proposition by also introducing initiatives to help address the Company’s share rating including triennial unconditional tender offers and an updated dividend policy. | Unchanged |
| Third Party Service Provider Risk | ||
| Cybersecurity and Operational Resilience Risk A cyber incident affecting the Manager’s systems could impair the accurate monitoring and reporting of the Company’s financial position, and compromise the confidentiality, integrity, or availability of sensitive data. Additionally, cyberattacks targeting the Company’s third-party service providers may disrupt the delivery of critical services or lead to the loss or misappropriation of Company assets. Such events could materially impact the Company’s operations and stakeholder confidence. This risk is heightened by technological advancements, including the increasing use of Artificial Intelligence (AI), which could present an acceleration risk to cyber security if traditional vulnerability management cycles do not keep pace. In addition to operational disruption, such incidents may result in reputational damage, potentially affecting the Company’s share price and investor demand. The Company relies entirely on TPPs, most notably the Manager, Administrator, Depositary and Registrar, for the delivery of its core services and infrastructure, making the resilience and security of these partners critical to the Company’s continued performance and integrity. | Due to the Company’s structure, cybersecurity & operational resilience are delegated to and managed by the key third party service providers. The Board assess cyber security and operational resilience by: Reviewing third-party assurance reports (SOC reports) on a regular basis to assess the adequacy of control environments across critical service providers. Monitoring cyber risk and resilience, including at least annual (or more frequent where appropriate) review of the Manager’s cyber security framework, aligned to recognised standards such as NIST. Maintaining oversight of business continuity arrangements for key service providers, including periodic review and ‘live’ testing of workplace recovery arrangements with hybrid working. Receiving regular reporting from the Manager on its risk, compliance and security framework, including the identification of control weaknesses and progress against a structured programme of remediation activities and strategic initiatives. | Unchanged |
| Investment Management Risk | ||
| Investment Strategy & Performance As an investment company, a key risk is that the investment strategy, guided by the Investment Policy, The Company’s investment objectives, strategy and/or performance no longer meets investors’ demands. The adoption of an inappropriate investment strategy, whether through suboptimal asset allocation, excessive or insufficient gearing, or misalignment with market conditions, may lead to underperformance relative to the Company’s benchmark and its peer group over a 3 to 5 year period. Furthermore, the effectiveness of the Manager’s investment approach, including strategic execution and adequacy of resourcing, is critical to delivering sustainable performance. Any deficiencies in these areas may result in prolonged underperformance, impairing the Company’s ability to meet its stated objectives and diminishing its attractiveness to existing and prospective investors. | The Board has put in place investment limits and guidelines which are monitored and reported by the Manager. The Portfolio Managers attend each Board meeting where performance is discussed and detailed reports are reviewed. The Board regularly compares the Company’s NAV performance over both the short and long-term to that of the benchmark and peer group as well as reviewing the portfolio’s performance against benchmark (attribution) and risk adjusted performance (volatility, beta, tracking error, Sharpe ratio) of the Company and its peers. The Portfolio Managers can use gearing within parameters set by the Board. The Board generally holds a separate meeting devoted to investment and wider strategic matters each year. | Unchanged |
| Currency and Exchange Rate Risk The Company is exposed to currency risk arising from its Asian investment strategy, which involves holding assets and generating income in a range of non-sterling currencies. Fluctuations in exchange rates, particularly between sterling and other major currencies, can materially impact returns, as well as the level of income received from overseas investments. Furthermore, shifts in macroeconomic factors such as inflation and interest rates may further amplify exchange rate movements, contributing to variability in portfolio returns. | With the exception of borrowings in foreign currency, the Company does not normally hedge its currency positions but may do so should the Portfolio Managers or the Board feel this to be appropriate. Contracts are limited to currencies and amounts commensurate with the asset exposure. The foreign currency exposure of the Company is reviewed at Board meetings. | Unchanged |
Emerging Risk
The AIC Code of Corporate Governance mandates the Audit Committee to establish procedures for identifying emerging risks facing the Company. These risks are defined as potential trends, sudden events, or changing risks characterised by a high degree of uncertainty regarding their occurrence probability and possible effects on the Company.
Once identified, as the impact of emerging risks becomes clearer, they may be added to the Company’s risk matrix, and mitigating actions considered as necessary. Previously identified emerging risks are either removed from the risk matrix if they are no longer considered potential risks to the Company or escalated to principal risks.
At the time of this report's publication, the Board, through the Audit Committee, has identified the following principal emerging risk to the Company.
| Risk & Impact | Controls & Mitigation | Trend |
| During | ||
| Year | ||
| Strategic Risk | ||
| Disruptive Shareholder Activism The Board welcomes feedback from, and engagement with, all shareholders. However, the Company may be exposed to disruptive activism by a minority of investors who seek to influence management decisions, corporate strategy, or governance practices by pursuing adversarial tactics. Activist shareholders may have conflicting interests with other shareholders. Activist shareholders may push for changes that could alter the Company’s operational direction, impact long-term value creation, or lead to strategic restructuring. Such activism could result in reputational risk, increased costs related to shareholder disputes, and potential changes in the Company’s capital structure or governance framework. While the Company seeks to engage constructively with its investors, the risk of activist campaigns could affect long-term shareholder value and market perception. | The following mitigants are in place and, in conjunction with the Manager, are reviewed by the Board regularly: • Strong Governance Framework A robust and transparent governance structure is in place which includes an independent Board with diverse expertise. This ensures that the interests of all shareholders are properly represented. Clear policies on shareholder engagement and decision-making processes are in place which may limit the likelihood of activism. • Regular Shareholder Engagement The Company and Manager have in place processes for ongoing and proactive communication with shareholders through regular updates, investor meetings, and consultation on key issues helps align the interests of management and investors. • Clear Investment Strategy and Performance The Company has put in place a well-communicated and consistently executed investment strategy that delivers competitive performance relative to peers and benchmarks. • Shareholder Rights and Voting Procedure There are clearly defined shareholder rights set out in the Company’s Articles of Association and transparent voting procedures are in place at shareholder meetings including the AGM. • Active Monitoring of Shareholder Composition The Board through the Manager, regularly monitors the shareholder base to identify new investors early which would allow the Company to engage in timely dialogue and address any concerns proactively. • Discount Control Mechanism Where appropriate, the Board will step up share buybacks to manage discount volatility, support shareholder value, and contain activist influence, thereby reducing the likelihood of shareholder dissatisfaction and intervention. In addition the Company has implemented a triannual unconditional tender offer. | New |
Viability Statement
The Company is a collective investment vehicle rather than a commercial business venture and is designed and managed for long-term investment. The Company’s investment objective clearly sets out the long-term nature of the returns from the portfolio and this is the view taken by both the Directors and the Portfolio Managers in the running of the portfolio. The Company intends to proceed with triennial unconditional tender offers for up to 100% of the Company’s issued share capital at a 4.0% discount to the prevailing NAV (debt at fair value, cum income). The first Unconditional Tender Offer is expected to be put forward to shareholders in 2028, by no later than the date of announcement of its final results for the financial year ended 30 April 2028. The Directors remain confident in the Company’s Investment Case and Corporate Proposition, as detailed on pages 9 and 10, to deliver against the Company’s investment objectives. On this basis and notwithstanding the triennial unconditional tender offers referred to above, the Directors consider that ‘long-term’ for the purpose of this viability statement is three years, albeit that the life of the Company is not intended to be limited to this period.
In their assessment of the Company’s viability, the Directors have performed a robust assessment of the emerging and principal risks. The Directors considered the risks to which it is exposed, as set out on pages 28 to 32, together with mitigating factors. Their assessment considered these risks, as well as the Company’s investment objective, investment policy and strategy, the investment capabilities of the Manager and the business model of the Company, which has withstood several major market downcycles since the Company’s inception in 1995. Their assessment also covered the current outlook for the Asian economies and equity markets, the ongoing conflicts in Ukraine, the Middle East, US-China relations and wider geopolitical matters; the demand for and buybacks of the Company’s shares; the Company’s borrowing structure and level of gearing; the liquidity of the portfolio; and the Company’s future income and annual operating costs. Financial modelling has been performed on both revenue forecasts and loan covenants, including various levels of stress testing scenarios. These indicate that even under stressed conditions such as periods of large falls in underlying holding valuations, the Company remains viable with extensive reserves available for payment of dividends and outstanding debt remaining well covered. The Directors and the Manager are cautiously optimistic that Asia remains a region with sound economic and corporate fundamentals. Lastly, whilst past performance may not be indicative of performance in the future, the sustainability of the Company can be demonstrated to date by there having been no material change in the Company’s investment objective since its launch in 1995.
The Directors confirm that they have a reasonable expectation that the Company will be able to continue in operation and meet its liabilities as they fall due for the three year period from the signing of the balance sheet.
Duty to Promote the Success of the Company (s.172)
The Directors have a statutory duty under section 172 of the Companies Act 2006 to promote the success of the Company whilst also having regard to certain broader matters, including the need to engage with employees, suppliers, customers and others, and to have regard to their interests. The Company has no employees and no customers in the traditional sense and in accordance with the Company’s nature as an investment trust, the Board’s principal concern has been, and continues to be, the interests of the Company’s shareholders taken as a whole. In doing so, it has due regard to the impact of its actions on other stakeholders including the Manager, other TPPs and the impact of the Company’s operations on the community and the environment which are all taken into account during all discussions and as part of the Board’s decision making.
The Board has a responsible governance culture. A formal schedule of matters reserved for decision by the Board details the responsibilities of the Board. The main responsibilities include: setting the Company’s objectives, policies and standards; ensuring that the Company’s obligations to shareholders and others are understood and complied with; approving accounting policies and dividend policy; managing the capital structure; setting long-term objectives and strategy; assessing risk; reviewing investment performance; approving loans and borrowing; and controlling risks. The Schedule of Matters Reserved for the Board and the Terms of Reference for its Committees are reviewed at least annually and are published on the Company’s web page: https://www.invesco.com/uk/en/investment-trusts/invesco-asia-dragon-trust.html.
The Board is committed to maintaining open channels of communication and to engage with stakeholders in a manner which they find most meaningful. The table on the next page sets out how the Board engaged with each of its key stakeholders during the year under review.
| Stakeholder | Key considerations and engagement |
| Shareholders | The Board endeavours to provide shareholders with a full understanding of the Company’s activities and reports formally to shareholders each year by way of the Half-Yearly and Annual Financial Reports. This is supplemented by the daily publication of the net asset value of the Company’s ordinary shares and monthly factsheets. Shareholders who attend the AGM can meet the Board and the Portfolio Managers and have the opportunity to hear directly from the Portfolio Managers and ask questions. Shareholders can also visit the Company’s section of the Manager’s investment trust website, www.invesco.co.uk/invescoasia to access copies of Half-Yearly and Annual Financial Reports, shareholder circulars, factsheets and Stock Exchange announcements. There is regular dialogue between the Board, the Manager and institutional shareholders to discuss aspects of investment performance, governance and strategy and to listen to shareholder views in order to help to develop an understanding of their issues. Meetings between the Manager and institutional shareholders are reported to the Board, which monitors and reviews shareholder communications on a regular basis. |
| Investment Manager & other key Third-Party service Providers (‘TPP’) | The Board engages with the Manager at every Board meeting and receives updates from the Portfolio Managers on a regular basis outside of these meetings. At every Board meeting, the Directors receive an investor relations update from the Manager, which details any significant changes in the Company’s shareholder register, shareholder feedback, as well as notifications of any publications or press articles. In order to function as an investment trust with a premium listing on the London Stock Exchange, the Company relies on a diverse range of reputable advisers for support in meeting all relevant obligations. The Board through the Manager maintains regular contact with its key external service providers and receives regular reporting from them, both through the Board and committee meetings, as well as outside of the regular meeting cycle. Their advice, as well as their needs and views are routinely taken into account. The Board (through the Management Engagement Committee) formally assesses its TPPs’ performance, fees and continuing appointment annually to ensure that the key service providers continue to function at an acceptable level and are appropriately remunerated to deliver the expected level of service. The Audit Committee reviews and evaluates the financial reporting control environments in place at each service provider. There have been no material changes to the level of service provided by the Company’s third-party suppliers. |
| Investee Companies | On the Company’s behalf the Manager engages with investee companies, particularly in relation to ESG matters, and shares held in the portfolio are voted at general meetings. An example of how the Manager engaged with one investee company during the year can be found on page 15. |
| Broker | The Board and the Manager regularly engage with the Broker in relation to the sales strategy and marketing of the Company during the year, in order to provide liquidity for investors. |
| Association of Investment Companies (‘AIC’) | The Company is a member of the AIC, which looks after the interests of investment trusts and provides information to the market. Comprehensive information relating to the Company can be found on the AIC website. As a member of the AIC, the Company is welcomed to comment on consultations and proposal documents on matters affecting the Company and annually to nominate and vote for future board members. |
Some of the key discussions and decisions the Board made during the year were:
• Cancellation of the Company’s Share Premium Account following shareholder approval;
• to approve an update to the dividend policy whereby the Company maintained the policy of paying an aggregate annual dividend equal to approximately 4.0% of its NAV; but increased the frequency of its dividend payments from a half-yearly basis (2.0% in each of November and April) to a quarterly basis (four equal dividends of approximately 1.0% every three months, with payments made in January, April, July and October of each year). In addition the Board agreed to pay total dividends for the year ended 30 April 2026 of 15.8p per share. Dividends were paid from a combination of revenue and capital reserves. Factors the Board took into consideration in deciding the dividends for the 2026 financial year included: shareholder expectations, revenue generated by the Company during the year, revenue forecasts for the 2027 financial year and the capacity of the Company to pay dividends out of its reserves; and
• to undertake a share buy back programme as the Company’s discount exceeded the Board’s average discount target of less than 10% of NAV calculated on a cum income basis (formerly ex-income) over the financial year.
The Company communicates with shareholders at least twice a year providing information about shareholder meetings, dividend payments and financial results. The Company’s page on the Manager’s website provides all shareholder information and regularly hosts video presentations (vlogs) and articles by the Portfolio Managers and the wider Asian and Emerging Markets Equities team. The Company holds its AGM in London, this provides shareholders with the opportunity to attend a presentation and actively engage with the Portfolio Managers and meet with Directors and representatives of the Manager. Furthermore, the Manager provides a schedule of regional meetings with institutional investors and analysts to gather the views and thoughts of institutional investors. This year’s AGM will be held on 15 September 2026 and shareholders are encouraged to attend the AGM.
Modern Slavery
As an investment vehicle the Company does not provide goods or services in the normal course of business, and does not have customers or employees. Accordingly, the Directors consider that the Company is not within the scope of the UK Modern Slavery Act 2015.
Board Diversity
The Board takes into account many factors, including the balance of skills, knowledge, diversity and experience, amongst other factors when reviewing its composition and appointing new directors.
In view of its size, the Board will continue to ensure that all appointments are made on the basis of merit against the specification prepared for each appointment. In doing so, the Board will seek to meet the targets set out in the FCA’s UK Listing Rule 6.6.6R (9)(a), which are set out below.
In accordance with the UK Listing Rule 6.6.6R (9), (10) and (11) the Board has provided the following information in relation to its diversity.
Board Gender as at 30 April 2026
| Number of | |||
| senior positions | |||
| on the Board | |||
| Number of | Percentage | (CEO, CFO, SID | |
| board members | of the board | and Chair)(1) | |
| Men | 3 | 37.5% | 1 |
| Women | 5 | 62.5%(2) | 1 |
(1) The Company is externally managed and does not have executive management functions specifically, it does not have a CEO or CFO. The Board believes that the target as narrowly defined by the FCA is not applicable and considers that the role of Chair, SID and Chair of the Audit Committee are all senior positions. Of these three senior roles, two are performed by women and one by a man.
(2) Exceeds target of 40% as set out in UKLR 6.6.6R (9)(a)(i).
Board Ethnic Background as at 30 April 2026
| Number of | |||
| senior positions | |||
| on the Board | |||
| Number of | Percentage | (CEO, CFO, SID | |
| board members | of the board | and Chair)(1) | |
| White British or other White (including minority-white groups) | 6 | 75% | 2 |
| Minority ethnic | 2 | 25% | – |
(1) As stated in the Board Gender disclosure, the Board believes that the target as narrowly defined by the FCA is not applicable and considers that the role of Chair, SID and Chair of the Audit Committee are all senior positions. The three senior roles are occupied by directors who self-identify as White British or other White (including minority-white groups).
The information included above in relation to the gender and ethnic background of the Board has been obtained following confirmation from the individual Directors.
There have been no changes since the year end that have affected the Company’s ability to meet the targets set in UKLR 6.6.6R (9)(a).
Environmental, Social and Governance (‘ESG’) Matters
The Board recognises the importance of ESG considerations and considers that the Company has a responsibility to shareholders of ensuring high standards of corporate governance are maintained in the companies in which it invests. As an investment company with no employees, property or activities outside investment, environmental policy has limited direct application. In relation to the portfolio, the Company has delegated the management of the Company’s investments to the Manager.
The Manager forms part of the Invesco Ltd group. Invesco Ltd (‘Invesco’) is committed to being a responsible investor and applies, and is a signatory to, the United Nations Principles for Responsible Investment (‘PRI’), which demonstrates its extensive efforts in terms of ESG integration, active ownership, investor collaboration and transparency. Invesco scored four stars for its Investment & Stewardship Policy under new scoring methodology produced by PRI. This followed five consecutive years of achieving an A+ rating for responsible investment (Strategy & Governance) under the previous methodology. In addition, Invesco is an active member of the UK Sustainable Investment and Finance Association as well as a supporter of the Task Force on Climate-related Financial Disclosure (‘TCFD’) since 2019 and published its latest iteration of its Global TCFD Report in 2026.
The Manager discloses in its Alternative Investment Fund Managers (‘AIFM’) document as well as on its webpage https://www.invesco.com/uk/en/about-us/esg-and-responsible-investing.html, how sustainability risks are integrated.
Regarding stewardship, the Board considers that the Company has a responsibility as a shareholder towards ensuring that high standards of corporate governance are maintained in the companies in which it invests. To achieve this, the Board does not seek to intervene in daily management decisions, but aims to support high standards of governance and, where necessary, will take the initiative to ensure those standards are met. The principal means of putting shareholder responsibility into practice is through the exercise of voting rights. The Company’s voting rights are exercised on an informed and independent basis.
The Company’s stewardship functions have been delegated to the Manager, which has adopted a clear and considered policy towards its responsibility as a shareholder on behalf of the Company. As part of this policy, the Manager takes steps to satisfy itself about the extent to which the companies in which it invests look after shareholders’ value and comply with local recommendations and practices, such as the UK Corporate Governance Code.
Further details are shown in the Manager’s ESG Monitoring and Engagement section on pages 15 to 18.
A copy of the Manager’s ESG stewardship approach and objectives can be read in its UK Stewardship Code Report at https://www.invesco.com/content/dam/invesco/emea/en/pdf/2024-uk-stewardship-code-report.pdf
Task Force for Climate-related Financial Disclosures (‘TCFD’)
Whilst TCFD is currently not applicable to the Company, the Manager has produced a product level report on the Company in accordance with the FCA’s rules and guidance regarding the disclosure of climate-related financial information consistent with TCFD Recommendations and Recommended Disclosures. These disclosures are intended to help meet the information needs of market participants, including institutional clients and consumers of financial products, in relation to the climate-related impact and risks of the Manager’s TCFD in-scope business. The product level report on the Company is available on the Company’s website https://www.invesco.com/content/dam/invesco/uk/en/product-documents/investment-trust/fund/esg/invesco-asia-trust-plc_tcfd-report_en-uk.pdf
Invesco’s Group Level Task Force on Climate-Related Financial Disclosures (‘TCFD’) is available on the Managers’ Website at https://www.invesco.com/content/dam/invesco/emea/en/pdf/ivz_global-tcfd-report.pdf
The Strategic Report was approved by the Board of Directors on 21 July 2026.
Invesco Asset Management Limited
Corporate Company Secretary
Statement of Directors’ Responsibilities
IN RESPECT OF THE PREPARATION OF THE ANNUAL FINANCIAL REPORT AND THE FINANCIAL STATEMENTS
The Directors are responsible for preparing the Annual Financial Report and financial statements in accordance with applicable law and regulations.
Company law requires the Directors to prepare financial statements for each financial year. Under that law they have elected to prepare the financial statements in accordance with UK accounting standards, and applicable law, including FRS 102 the Financial Reporting Standard applicable in the UK and Republic of Ireland.
Under company law the Directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Company and of its profit or loss for that period.
In preparing these financial statements, the Directors are required to:
– select suitable accounting policies and then apply them consistently;
– make judgements and estimates that are reasonable and prudent;
– state whether applicable UK accounting standards have been followed, subject to any material departures disclosed and explained in the financial statements;
– assess the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern; and
– use the going concern basis of accounting unless they either intend to liquidate the Company or to cease operations or have no realistic alternative but to do so.
The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company’s transactions and disclose with reasonable accuracy at any time the financial position of the Company and enable them to ensure that its financial statements comply with the Companies Act 2006. They are responsible for such internal control as they determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error, and have general responsibility for taking such steps as are reasonably open to them to safeguard the assets of the Company and to prevent and detect fraud and other irregularities.
Under applicable law and regulations, the Directors are also responsible for preparing a Strategic Report, Directors’ Report, Directors’ Remuneration Report and Corporate Governance Statement that complies with that law and those regulations.
The Directors are responsible for the maintenance and integrity of the corporate and financial information included on the Company’s website, which is maintained by the Company’s Manager. Legislation in the UK governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.
Responsibility Statement of the Directors in Respect of the Annual Financial Report
We confirm that to the best of our knowledge:
– the financial statements, prepared in accordance with the applicable set of accounting standards, give a true and fair view of the assets, liabilities, financial position and profit or loss of the Company; and
– the Strategic Report includes a fair review of the development and performance of the business and the position of the issuer, together with a description of the principal risks and uncertainties that they face.
We consider the Annual Financial Report, taken as a whole, is fair, balanced and understandable and provides the information necessary for shareholders to assess the Company’s position and performance, business model and strategy.
Signed on behalf of the Board of Directors
Neil Rogan
Chair
21 July 2026
Income Statement
| Year ended 30 April 2026 | Year ended 30 April 2025 | ||||||
| Revenue | Capital | Total | Revenue | Capital | Total | ||
| Notes | £’000 | £’000 | £’000 | £’000 | £’000 | £’000 | |
| Gains/(losses) on investments held at | |||||||
| fair value | 9 | – | 267,789 | 267,789 | – | (32,024) | (32,024) |
| Gains on foreign exchange | – | 462 | 462 | – | 2,400 | 2,400 | |
| Income | 2 | 25,091 | 200 | 25,291 | 12,683 | 67 | 12,750 |
| Investment management fee | 3 | (927) | (2,779) | (3,706) | (434) | (1,300) | (1,734) |
| Other expenses | 4 | (1,573) | 146 | (1,427) | (839) | (1,588) | (2,427) |
| Net return before finance costs | |||||||
| and taxation | 22,591 | 265,818 | 288,409 | 11,410 | (32,445) | (21,035) | |
| Finance costs | 5 | (308) | (925) | (1,233) | (206) | (618) | (824) |
| Net return on ordinary activities | |||||||
| before taxation | 22,283 | 264,893 | 287,176 | 11,204 | (33,063) | (21,859) | |
| Tax on ordinary activities | 6 | (2,303) | (2,576) | (4,879) | (1,164) | (1,741) | (2,905) |
| Net return on ordinary activities after | |||||||
| taxation for the financial year | 19,980 | 262,317 | 282,297 | 10,040 | (34,804) | (24,764) | |
| Net return per ordinary share: | |||||||
| Basic | 7 | 9.83p | 128.97p | 138.80p | 10.67p | (37.00)p | (26.33)p |
The total columns of this statement represent the Company’s profit and loss account, prepared in accordance with UK Accounting Standards. The return on ordinary activities after taxation is the total comprehensive income and therefore no additional statement of other comprehensive income is presented. The supplementary revenue and capital columns are presented for information purposes in accordance with the Statement of Recommended Practice issued by the Association of Investment Companies. All items in the above statement derive from continuing operations of the Company.
Statement of Changes in Equity
| Capital | ||||||||
| Share | Share | Redemption | Special | Capital | Revenue | |||
| Capital | Premium | Reserve | Reserve(1) | Reserve(1) | Reserve(1) | Total | ||
| Notes | £’000 | £’000 | £’000 | £’000 | £’000 | £’000 | £’000 | |
| At Year ended 30 April 2024 | 7,500 | – | 5,624 | 31,912 | 191,364 | 1,866 | 238,266 | |
| Return on ordinary activities | – | – | – | – | (34,804) | 10,040 | (24,764) | |
| Dividends paid | 8 | – | – | – | – | (10,315) | (5,265) | (15,580) |
| Net proceeds from the combination with | ||||||||
| Asia Dragon Trust plc | 13 | 14,262 | 530,509 | – | – | – | – | 544,771 |
| Costs in relation to issue of ordinary shares | – | (418) | – | – | – | – | (418) | |
| Shares bought back and held in treasury | 13 | – | – | – | (12,363) | – | – | (12,363) |
| At Year ended 30 April 2025 | 21,762 | 530,091 | 5,624 | 19,549 | 146,245 | 6,641 | 729,912 | |
| Return on ordinary activities | – | – | – | – | 262,317 | 19,980 | 282,297 | |
| Dividends paid | 8 | – | – | – | – | (17,497) | (14,611) | (32,108) |
| Cancellation of the share premium account | 14 | – | (530,091) | – | 530,091 | – | – | – |
| Shares bought back and held in treasury | 13 | – | – | – | (14,436) | – | – | (14,436) |
| At Year ended 30 April 2026 | 21,762 | – | 5,624 | 535,204 | 391,065 | 12,010 | 965,665 |
(1) These reserves form the distributable reserves of the Company and may be used to fund distributions by way of dividends.
Balance Sheet
| At 30 April | At 30 April | ||
| 2026 | 2025 | ||
| Notes | £’000 | £’000 | |
| Fixed assets | |||
| Investments held at fair value through profit or loss | 9 | 1,001,399 | 772,229 |
| Current assets | |||
| Debtors | 10 | 3,574 | 2,623 |
| Cash | 2,430 | 2,400 | |
| 6,004 | 5,023 | ||
| Creditors: amounts falling due within one year | |||
| Bank overdraft | (435) | – | |
| Bank facility | 11 | (35,973) | (43,923) |
| Other creditors | 11 | (1,714) | (986) |
| (38,122) | (44,909) | ||
| Net current liabilities | (32,118) | (39,886) | |
| Total assets less current liabilities | 969,281 | 732,343 | |
| Provision for deferred tax liabilities | 12 | (3,616) | (2,431) |
| Net assets | 965,665 | 729,912 | |
| Capital and reserves | |||
| Share capital | 13 | 21,762 | 21,762 |
| Other reserves: | |||
| Share premium | 14 | – | 530,091 |
| Capital redemption reserve | 14 | 5,624 | 5,624 |
| Special reserve | 14 | 535,204 | 19,549 |
| Capital reserve | 14 | 391,065 | 146,245 |
| Revenue reserve | 14 | 12,010 | 6,641 |
| Total shareholders’ funds | 965,665 | 729,912 | |
| Net asset value per ordinary share | |||
| Basic | 15 | 479.67p | 356.31p |
The financial statements were approved and authorised for issue by the Board of Directors on 21 July 2026.
Signed on behalf of the Board of Directors
Neil Rogan
Chair
Notes to the Financial Statements
1. Accounting Policies
Accounting policies describe the Company’s approach to recognising and measuring transactions during the year and the position of the Company at the year end.
A summary of the principal accounting policies, all of which have been consistently applied throughout this and the preceding year is set out below:
(a) Basis of Preparation
(i) Accounting Standards applied
The financial statements have been prepared in accordance with applicable United Kingdom Accounting Standards and applicable law (UK Generally Accepted Accounting Practice (‘UK GAAP’)), including FRS 102, and with the Statement of Recommended Practice Financial Statements of Investment Trust Companies and Venture Capital Trusts, updated by the Association of Investment Companies in July 2022 (‘SORP’). The financial statements are prepared on a going concern basis.
As an investment fund the Company has the option, which it has taken, not to present a cash flow statement as the following conditions have been met:
• substantially all investments are highly liquid;
• substantially all investments are carried at market value; and
• a statement of changes in equity is provided.
ii) Going concern
The financial statements have been prepared on a going concern basis. The Directors performed an assessment of the Company’s ability to meet its liabilities as they fall due. In performing this assessment, the Directors took into consideration the continuing uncertain economic outlook and other geopolitical events including:
• the level of borrowings, cash balances and the diversified portfolio of readily realisable securities which can be used to meet short-term funding commitments, including repayment of the bank facility;
• the net current liability position of the Company, after the deduction of drawn-down borrowings, which will be met through the renewal of the existing credit facility or the sale of investments in order to repay any borrowings;
• the ability of the Company to meet all of its liabilities and ongoing expenses from its assets;
• revenue and operating cost forecasts for the forthcoming year;
• the ability of third-party service providers to continue to provide services; and
• potential downside scenarios including a fall in the valuation of the investment portfolio or levels of investment income.
Based on this assessment, the Directors are satisfied that the Company has adequate resources to continue in operational existence for at least 12 months after signing the balance sheet and the financial statements have therefore been prepared on a going concern basis.
(iii) Significant Accounting Estimates and Judgements
The preparation of the financial statements may require the Directors to make estimates where uncertainty exists. It also requires the Directors to make judgements, estimates and assumptions, in the process of applying the accounting policies. There have been no significant judgements, estimates or assumptions for the current or preceding year other than the Scheme of Reconstruction in the preceding year.
(b) Foreign Currency
(i) Functional and presentation currency
The Company’s investments are made in several currencies, however, the financial statements are presented in sterling, which is the Company’s functional and presentational currency. In arriving at this conclusion, the Directors considered that the Company’s shares are listed and traded on the London Stock Exchange, the shareholder base is predominantly in the United Kingdom and the Company pays dividends and expenses in sterling.
(ii) Transactions and balances
Transactions in foreign currency, whether of a revenue or capital nature, are translated to sterling at the rates of exchange ruling on the dates of such transactions. Foreign currency assets and liabilities are translated to sterling at the rates of exchange ruling at the balance sheet date. Any gains or losses, whether realised or unrealised, are taken to the capital reserve or to the revenue account, depending on whether the gain or loss is of a capital or revenue nature. All gains and losses are recognised in the income statement.
(c) Financial Instruments
The Company has chosen to apply the provisions of Sections 11 and 12 of FRS 102 in full in respect of the financial instruments, which is explained below.
(i) Recognition of financial assets and financial liabilities
The Company recognises financial assets and financial liabilities when the Company becomes a party to the contractual provisions of the instrument. The Company offsets financial assets and financial liabilities in the financial statements if the Company has a legally enforceable right to set off the recognised amounts and interests and intends to settle on a net basis.
(ii) Derecognition of financial assets
The Company derecognises a financial asset when the contractual rights to the cash flows from the asset expire or it transfers the right to receive the contractual cash flows on the financial asset in a transaction in which substantially all the risks and rewards of ownership of the financial asset are transferred. Any interest in the transferred financial asset that is created or retained by the Company is recognised as an asset.
(iii) Derecognition of financial liabilities
The Company derecognises financial liabilities when its obligations are discharged, cancelled or expired.
(iv) Trade date accounting
Purchases and sales of financial assets are recognised on trade date, being the date on which the Company commits to purchase or sell the assets.
(v) Classification and measurement of financial assets and financial liabilities
Financial assets
The Company’s investments are held at fair value through profit or loss as they meet the definition of basic financial instruments as defined in FRS 102. Financial assets held at fair value through profit or loss are initially recognised at fair value, which is taken to be their cost, with transaction costs expensed in the income statement, and are subsequently valued at fair value.
Financial assets measured at amortised cost include cash, debtors and prepayments.
Fair value for investments that are actively traded in organised financial markets, is determined by reference to stock exchange quoted bid prices at the balance sheet date and therefore reflect market participants’ view of climate change risk. For investments that are not actively traded and where active stock exchange quoted bid prices are not available, fair value is determined by reference to a variety of valuation techniques such as last traded price broker quotes with further details in note 17 on pages 76 and 77.
Financial liabilities
Financial liabilities, including borrowings, are initially measured at fair value, net of transaction costs and are subsequently measured at amortised cost using the effective interest method.
(d) Cash and Cash Equivalents
Cash and cash equivalents may comprise short term deposits which are readily convertible to a known amount of cash and are subject to an insignificant risk of change in value. Investments are regarded as cash equivalents if they meet all of the following criteria: highly liquid investments held in the Company’s base currency that are readily convertible to a known amount of cash, are subject to an insignificant risk of change in value and have a maturity of no more than three months. There were no cash equivalents at the balance sheet date.
(e) Income
All dividends are taken into account on the date investments are marked ex-dividend, and UK dividends are shown net of any associated tax credit. Where the Company elects to receive dividends in the form of additional shares rather than cash, the equivalent of the cash dividend is recognised as income in the revenue account and any excess in value of the shares received over the amount of the cash dividend is recognised in capital. Special dividends representing a return of capital are allocated to capital in the income statement and then taken to capital reserves. Dividends will generally be recognised as revenue however all special dividends will be reviewed, with consideration given to the facts and circumstances of each case, including the reasons for the underlying distribution, before a decision over whether allocation is to revenue or capital is made. Interest income and expenses are accounted for on an accruals basis. Other income from investments is accounted for on an accruals basis. Deposit interest receivable is accounted for on an accruals basis.
(f) Expenses and Finance Costs
Expenses are recognised on an accruals basis and finance costs are recognised using the effective interest method in the income statement.
The investment management fee and finance costs are allocated 75% to capital and 25% to revenue. This is in accordance with the Board’s expected long-term split of returns, in the form of capital gains and income respectively, from the portfolio.
Investment transaction costs are recognised in capital in the income statement. All other expenses are allocated to revenue in the income statement.
(g) Dividends
Dividends are not recognised in the accounts unless there is an obligation to pay at the balance sheet date. Proposed final dividends are recognised in the period in which they are either approved by or paid to shareholders.
(h) Taxation
The liability to corporation tax is based on taxable profit for the period. Taxable profit differs from profit before tax as reported in the income statement because it excludes items of income or expenses that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The tax charge is allocated between the revenue and capital accounts on the marginal basis whereby revenue expenses are matched first against taxable income in the revenue account.
Deferred taxation is recognised in respect of all timing differences that have originated but not reversed at the balance sheet date where transactions or events that result in an obligation to pay more tax or a right to pay less tax in the future have occurred. Timing differences are differences between the Company’s taxable profits and its results as stated in the financial statements. Deferred taxation assets are recognised where, in the opinion of the Directors, it is more likely than not that these amounts will be realised in future periods.
A deferred tax asset has not been recognised in respect of surplus management expenses and the non-trade loan relationship deficit as the Company is unlikely to have sufficient future taxable revenue to offset against these.
Gains and losses on sale of investments purchased and sold in India are liable to capital gains tax in India.
At each year end date, a provision for Indian capital gains tax is calculated based upon the Company’s realised and unrealised gains and losses. There are two rates of tax: short-term and long-term. The short-term rate of tax is applicable to investments held for less than 12 months and the long-term rate of tax is applicable to investments held for more than 12 months.
The provision for the Indian capital gains tax is recognised in the balance sheet and the year-on-year movement in the deferred tax provision is recognised in the income statement.
2. Income
This note shows the income generated from the portfolio (investment assets) of the Company and income received from any other source.
| 2026 | 2025 | |
| £’000 | £’000 | |
| Income from investments: | ||
| UK dividends | 92 | 198 |
| Overseas dividends | 23,705 | 12,187 |
| Overseas special dividends | 1,189 | 235 |
| Stock dividends | – | 13 |
| Total dividend income | 24,986 | 12,633 |
| Other income: | ||
| Deposit interest | 105 | 50 |
| 105 | 50 | |
| Total income | 25,091 | 12,683 |
Special dividends of £200,000 were recognised in capital during the year (2025: £67,000).
3. Investment Management Fee
This note shows the investment management fee due to the Manager which is calculated and paid quarterly.
| 2026 | 2025 | ||||||
| Revenue | Capital | Total | Revenue | Capital | Total | ||
| £’000 | £’000 | £’000 | £’000 | £’000 | £’000 | ||
| Investment management fee (i) | , 927 | 2,779 | 3,706 | 434 | 1,300 | 1,734 | |
(i) Investment management fee for year ended 30 April 2026 includes a time-apportioned allocation of the total nine month fee waiver from the Manager equating to approximately 6.5 months, with the balance previously allocated to the prior year ending 30 April 2025.
Details of the investment management and secretarial agreement are given on page 40 in the Directors’ Report.
At 30 April 2026, £1,333,000 (2025: £281,000) was accrued in respect of the investment management fee.
Investment management fee and finance costs on any borrowings are charged 75% to capital and 25% to revenue. Prior to the asset acquisition of Asia Dragon Trust plc a management fee was payable quarterly in arrears equal to 0.75% per annum of the value of the Company’s total assets less current liabilities (including any short term borrowings) under management at the end of the relevant quarter and 0.65% per annum for any net assets over £250 million. Following the successful combination with Asia Dragon Trust plc becoming effective on 13 February 2025, the Investment Management Agreement was amended such that the existing management fee was reduced as follows:
• 0.75% on the first £125 million of the Net Asset Value;
• 0.60% above £125 million and up to £450 million of the Net Asset Value; and
• 0.50% on the Net Asset Value in excess of £450 million.
4. Other Expenses
The other expenses, including those paid to Directors and the auditor, of the Company are presented below; those paid to the Directors and the auditor are separately identified.
| 2026 | 2025 | ||||||
| Revenue | Capital | Total | Revenue | Capital | Total | ||
| £’000 | £’000 | £’000 | £’000 | £’000 | £’000 | ||
| Directors’ remuneration (i) | 322 | – | 322 | 182 | – | 182 | |
| Auditor’s fees (ii): | |||||||
| – for audit of the Company’s Annual | |||||||
| Financial Statements: | 57 | – | 57 | 60 | – | 60 | |
| Other administration expenses (iii) | 1,194 | (146) | 1,048 | 597 | 1,588 | 2,185 | |
| 1,573 | (146) | 1,427 | 839 | 1,588 | 2,427 | ||
(i) Directors’ fees authorised by the Articles of Association are £400,000 per annum. The Director’s Remuneration Report provides further information on Directors’ fees.
(ii) Auditor’s fees include out of pocket expenses but excludes VAT. The VAT is included in other administration expenses.
(iii) Other expenses include:
Expenses related to the combination with Asia Dragon Trust plc of £19,000 (2025: £1,579,000). £165,000 of VAT on expenses related to the combination was reclaimed and recognised in capital (2025: nil).
£38,000 (2025: £17,000) of employer’s National Insurance payable on Directors’ remuneration. As at 30 April 2026, the amounts outstanding on Directors’ remuneration was £24,000 (2025: £22,000); and the amount outstanding in respect of employer’s National Insurance was £2,000 (2025: £2,000).
custody fees of £380,000 (2025: £154,000) were charged to revenue and custody transaction charges of nil (2025: £9,000) which were charged to capital.
a separate fee paid to the Manager for secretarial and administrative services which is subject to annual adjustment in line with the UK Retail Price Index. During the year the Company paid £200,000 (2025: £143,000) for these services.
5. Finance Costs
Finance costs arise on any borrowing the Company has utilised in the year. The Company has a committed £80 million revolving credit facility (the ‘bank facility’) (see note 11 for further details).
| 2026 | 2025 | ||||||
| Revenue | Capital | Total | Revenue | Capital | Total | ||
| £’000 | £’000 | £’000 | £’000 | £’000 | £’000 | ||
| Bank facility fee | 12 | 37 | 49 | 6 | 17 | 23 | |
| Interest on bank facility | 296 | 888 | 1,184 | 186 | 560 | 746 | |
| Overdraft interest | – | – | – | 14 | 41 | 55 | |
| 308 | 925 | 1,233 | 206 | 618 | 824 | ||
6. Taxation
As an investment trust the Company pays no UK corporation tax on capital gains. The Company suffers no UK corporation tax on income arising on UK and certain overseas dividends. The Company’s tax charge arises from irrecoverable tax on overseas (generally non-EU) dividends and Indian capital gains tax paid and provided for.
(a) Tax charge
| 2026 | 2025 | ||||||
| Revenue | Capital | Total | Revenue | Capital | Total | ||
| £’000 | £’000 | £’000 | £’000 | £’000 | £’000 | ||
| Overseas tax | 2,303 | – | 2,303 | 1,164 | – | 1,164 | |
| Indian capital gains tax – paid – note 6(d) | – | 1,391 | 1,391 | – | 80 | 80 | |
| Total current tax charge | 2,303 | 1,391 | 3,694 | 1,164 | 80 | 1,244 | |
| Indian capital gains tax – movement in | |||||||
| provision – note 6(d) | – | 1,185 | 1,185 | – | 1,661 | 1,661 | |
| Total tax charge for the year | 2,303 | 2,576 | 4,879 | 1,164 | 1,741 | 2,905 | |
The overseas tax charge consists of irrecoverable withholding tax.
(b) Reconciliation of total tax charge
| 2026 | 2025 | |
| £’000 | £’000 | |
| Net return on ordinary activities before taxation | 287,176 | (21,859) |
| Theoretical tax at the current UK Corporation Tax rate of 25% (2025: 25%) | 71,794 | (5,465) |
| Effects of: | ||
| – Non-taxable UK dividends | (23) | (50) |
| – Non-taxable overseas dividends | (5,749) | (2,980) |
| – Non-taxable overseas special dividends | (347) | (79) |
| – (Gains)/losses on investments not subject to UK corporation tax | (67,062) | 8,258 |
| – Excess of allowable expenses over taxable income | 1,424 | (82) |
| – Disallowable expenses | (37) | 398 |
| – Overseas taxation | 2,303 | 1,164 |
| – Indian capital gains tax - paid | 1,391 | 80 |
| – Indian capital gains tax – provision – see (d) below | 1,185 | 1,661 |
| Tax charge for the year | 4,879 | 2,905 |
Given the Company’s status as an investment trust, and the intention to continue meeting the conditions required to obtain the necessary approval in the foreseeable future, the Company has not provided any UK corporation tax on any realised or unrealised capital gains or losses arising on investments.
(c) Factors that may affect future tax changes
The Company has cumulative excess management expenses of £33,839,000 (2025: £29,194,000) and a non-trade loan relationship deficit of £3,480,000 (2025: £2,429,000) giving total unutilised losses of £37,319,000 (2025: £31,623,000) that are available to offset future taxable revenue.
A deferred tax asset of £9,330,000 (2025: £7,906,000) at 25% (2025: 25%) has not been recognised in respect of these expenses since the Directors believe that there will be no taxable profits in the future against which the deferred tax assets can be offset.
(d) Indian capital gains tax
Capital gains arising from equity investments in Indian companies are subject to Indian Capital Gains Tax Regulations. Consequently, the Company is subject to both short and long-term capital gains tax in India on the growth in value of its Indian equities.
Although this capital gains tax only becomes payable at the point at which the underlying investments are sold and profits crystallised, the Company has made a provision for this tax liability for the year ended 30 April 2026 of £3,616,000 (At 30 April 2025: £2,431,000). See note 12 for further details.
7. Net return per Ordinary Share
Net return per share is the amount of gain or loss generated for the financial year divided by the weighted average number of ordinary shares in issue.
| 2026 | 2025 | |||||||
| Pence | £’000 | Pence | £’000 | |||||
| Net return per ordinary share is based on | ||||||||
| the following: | ||||||||
| Revenue return after taxation | 9.83 | 19,980 | 10.67 | 10,040 | ||||
| Capital return after taxation | 128.97 | 262,317 | (37.00) | (34,804) | ||||
| Total return after taxation | 138.80 | 282,297 | (26.33) | (24,764) | ||||
| 2026 | 2025 | |||||||
| £’000 | £’000 | |||||||
| Weighted average number of ordinary shares in issue during the year | 203,388,461 | 94,066,830 | ||||||
8. Dividends on Ordinary Shares
Dividends represent a return of income to shareholders for investing in the Company’s shares. These are determined by the Directors.
| 2026 | 2025 | |||
| Pence | £’000 | Pence | £’000 | |
| Dividends paid and recognised in the year: | ||||
| First interim dividend paid | 3.95 | 8,050 | 7.80 | 5,062 |
| Second interim dividend paid | 3.95 | 8,045 | 3.90 | 2,523 |
| Third interim dividend paid | 3.95 | 8,043 | 3.90 | 7,995 |
| Fourth interim dividend paid | 3.95 | 7,970 | – | – |
| 15.80 | 32,108 | 15.60 | 15,580 | |
Set out above are the total dividends paid in respect of the financial year, which is the basis on which the requirements of Section 1158–1159 of the Corporation Tax Act 2010 are considered.
The Company pays an aggregate annual dividend equal to approximately 4.0% of its NAV as at the last business day of April. The dividends will be payable quarterly in July, October, January and April.
9. Investments at Fair Value
The portfolio comprises investments which are predominantly listed and traded on regulated stock exchanges. The investments of the Company are registered in the name of the Company or in the name of nominees and held to the order of the Company.
Gains and losses are either:
• realised, usually arising when investments are sold; or
• unrealised, being the difference from cost on those investments still held at the year end.
| 2026 | 2025 | |
| £’000 | £’000 | |
| Opening valuation | 772,229 | 251,247 |
| Movements in the year: | ||
| Investments acquired from the combination with Asia Dragon Trust plc | – | 530,156 |
| Purchases at cost | 378,082 | 640,476 |
| Sales – proceeds | (416,701) | (617,626) |
| Gains/(losses) on investments in the year | 267,789 | (32,024) |
| Closing valuation | 1,001,399 | 772,229 |
| Closing book cost | 843,993 | 807,384 |
| Closing investment holding gains/(losses) | 157,406 | (35,155) |
| Closing valuation | 1,001,399 | 772,229 |
The Company received £416,701,000 (2025: £617,626,000) from investments sold in the year. The book cost of these investments when they were purchased was £341,473,000 (2025: £595,321,000) realising a profit of £75,228,000 (2025: £22,305,000) which when taken together with the movement in closing investment holding gains results in net gain on investments in the year of £267,789,000 (2025: net loss of £32,024,000). These investments have been revalued over time and until they were sold any unrealised gains/losses were included in the fair value of the investments.
The transaction costs included in gains on investments amount to £185,000 (2025: £477,000) on purchases and £488,000 (2025: £441,000) for sales.
10. Debtors
Debtors are amounts which are due to the Company, such as monies due from brokers for investments sold, income which has been earned (accrued) but not yet received and any taxes that are recoverable.
| 2026 | 2025 | |
| £’000 | £’000 | |
| Overseas withholding tax recoverable | 459 | 205 |
| VAT recoverable | 36 | 17 |
| Prepayments and accrued income | 3,079 | 2,401 |
| 3,574 | 2,623 |
11. Creditors: amounts falling due within one year
Creditors are amounts which must be paid by the Company and they are all due within 12 months of the balance sheet date.
The bank facility provides a specific amount of capital, up to £80 million, (2025: £80 million) over a specified period of time two years (2025: two years). Unlike a term loan, the revolving nature of the bank facility allows the Company to drawdown, repay and re-draw loans.
| 2026 | 2025 | |
| £’000 | £’000 | |
| Bank facility | 35,973 | 43,923 |
| Share buybacks awaiting settlement | 11 | 7 |
| Accruals | 1,703 | 979 |
| 37,687 | 44,909 |
The uncommitted (2025: uncommitted) unsecured multi-currency revolving credit facility (the ‘bank facility’) with The Bank of New York Mellon, has an interest payable based on the Adjusted Reference Rate (principally SOFR and SONIA respectively in respect of loans drawn in USD and GBP) plus a margin for amounts drawn. The bank facility attracts a facility fee of 0.05% (2025: 0.05%). The bank facility covenants are based on the lower of 25% of net asset value and £80 million (2025: lower of 25% of net asset value and £80 million), renewable on 19 February 2027, and require total assets to not fall below £200 million (2025: require total assets to not fall below £200 million). At the year end, the bank facility drawn down was in US dollars with a sterling equivalent of £35,973,000 (2025: £43,923,000).
12. Provision for deferred tax liabilities
The Company makes a deferred tax provision when a potential obligation exists that will probably have to settle in cash, but the amount is estimated and only becomes payable at the point at which the underlying investments are sold and profits crystallised.
| 2026 | 2025 | |
| £’000 | £’000 | |
| Provision for deferred Indian capital gains tax | 3,616 | 2,431 |
| 3,616 | 2,431 |
13. Share Capital
Share capital represents the total number of shares in issue. Any dividends declared will be paid on the shares in issue on the record date.
The Directors’ Report on page 40 sets out the share capital structure, restrictions and voting rights.
Share capital represents the total number of shares in issue, including treasury shares.
a) Allotted, called-up and fully paid
| 2026 | 2025 | |
| £’000 | £’000 | |
| Share capital: | ||
| Ordinary shares of 10p each | 20,132 | 20,485 |
| Treasury shares of 10p each | 1,630 | 1,277 |
| 21,762 | 21,762 |
(b) Share movements
| 2026 | 2025 | ||||
| Ordinary | Treasury | Ordinary | Treasury | ||
| number | number | number | number | ||
| Number at start of year | 204,853,151 | 12,766,594 | 65,908,287 | 9,091,594 | |
| Shares issued as a result of combination with | |||||
| Asia Dragon Trust plc | – | – | 142,619,864 | – | |
| Shares bought back and held in treasury | (3,533,000) | 3,533,000 | (3,675,000) | 3,675,000 | |
| Number at the end of the year | 201,320,151 | 16,299,594 | 204,853,151 | 12,766,594 | |
During the year the Company bought back, into treasury, 3,533,000 ordinary shares at a total cost of £14,436,000.
A further 2,111,000 shares have been bought back into treasury, at an average price of 491.12p, since 30 April 2026.
The Company introduced a performance conditional tender offer in 2020 whereby the Board had undertaken to effect a tender offer for up to 25.0% of the Company’s issued share capital in the event that certain conditions are met relating to performance of the net asset value compared to the benchmark index. Following the combination with Asia Dragon Trust plc in February 2025, the performance conditional tender offer was replaced with a triennial unconditional tender offer for up to 100% of the issued share capital at 4.0% discount to the prevailing NAV (debt at fair value, cum income). The first one will be no later than the date of the announcement of its final results for the financial year ended 30 April 2028.
14. Reserves
This note explains the different reserves attributable to shareholders. The aggregate of the reserves and share capital (see previous note) make up total shareholders’ funds.
The capital redemption reserve maintains the equity share capital arising from the buy-back and cancellation of shares and is non-distributable. The special reserve arose from the cancellation of the share premium account and is available as a distributable reserve to fund any future dividends, tender offers and share buybacks.
The capital reserve includes unrealised investment holding profits and losses, being the difference between cost and market value at the balance sheet date, as well as realised profits and losses on disposal of investments, expenses allocated to capital and special dividends received that are classified as capital in nature. The revenue reserve reflects the income and expenses as shown in the revenue column of the Income Statement. The capital and revenue reserves are distributable by way of dividend. Dividends are first funded from available revenue reserves and then funded from capital reserves at the date of the dividend payment.
Following approval by shareholders at the Company’s Annual General Meeting on 18 September 2025, the process to cancel the share premium account of the Company was confirmed by the High Court of Justice on 15 October 2025. Following the Court confirmation the entire share premium account was cancelled, amounting to £530,091,000. These distributable reserves provide the Company with flexibility, subject to financial performance, to make future distributions and/or, subject to shareholder authority, to buy back shares.
15. Net Asset Value
The Company’s total net assets (total assets less total liabilities) are often termed shareholders’ funds and are converted into net asset value per ordinary share by dividing by the number of shares in issue as at the reporting date.
The net asset values attributable to each share in accordance with the Company’s Articles are set out below.
| 2026 | 2025 | |
| Ordinary shareholders’ funds | £965,665,000 | £729,912,000 |
| Number of ordinary shares in issue, excluding treasury shares | 201,320,151 | 204,853,151 |
| Net asset value per ordinary share | 479.67p | 356.31p |
There is no dilution in this or the prior year and therefore no diluted net asset value per ordinary share has been disclosed.
16. Financial Instruments
Financial instruments comprise the Company’s investment portfolio, derivative financial instruments (if the Company had any), as well as any cash, borrowings, debtors and creditors. This note sets out the risks arising from the Company’s financial instruments in terms of the Company’s exposure and sensitivity, and any mitigation that the Manager or Board can take.
Risk Management Policies and Procedures
The Company’s portfolio is managed in accordance with its investment objective, which is set out in the Strategic Report on page 24. The Strategic Report then proceeds to set out the Manager’s investment process and the Company’s internal control and risk management systems as well as the Company’s principal and emerging risks and uncertainties. Risk management is an integral part of the investment management process and this note expands on certain of those risks in relation to the Company’s financial instruments, including market risk.
The accounting policies in note 1 include criteria for the recognition and the basis of measurement applied for financial instruments. Note 1 also includes the basis on which income and expenses arising from financial assets and liabilities are recognised and measured. The Directors have delegated to the Manager the responsibility for the day-to-day investment activities of the Company as more fully described in the Strategic Report.
As an investment trust the Company invests in equities and other investments for the long-term so as to meet its investment objective and policies. In pursuing its investment objective, the Company is exposed to a variety of risks that could result in either a reduction in the Company’s net assets or a reduction of the profits available for dividends. The risks applicable to the Company and the policies the Company used to manage these are summarised below and have remained substantially unchanged for the two years under review.
16.1 Market Risk
Market risk arises from changes in the fair value or future cash flows of a financial instrument because of movements in market prices. Market risk comprises three types of risk: currency risk (16.1.1), interest rate risk (16.1.2) and other price risk (16.1.3).
The Company’s Manager assesses the Company’s exposure when making each investment decision, and monitors the overall level of market risk on the whole of the investment portfolio on an ongoing basis. The Board meets at least quarterly to assess risk and review investment performance, as disclosed in the Board Responsibilities on page 47. Borrowing is used to enhance returns; however, this will also increase the Company’s exposure to market risk and volatility.
16.1.1 Currency Risk
As nearly all of the Company’s assets, liabilities and income are denominated in currencies other than sterling, movements in exchange rates will affect the sterling value of those items.
Management of the Currency Risk
The Manager monitors the Company’s exposure to foreign currencies on a daily basis and reports to the Board on a regular basis. The Company does not normally hedge its currency positions but may do so should the Portfolio Managers or the Board feel this was appropriate. Contracts are limited to currencies and amounts commensurate with the asset exposure.
Income denominated in foreign currencies is converted to sterling on receipt. The Company does not use financial instruments to mitigate the currency exposure in the period between the time that income is accrued and received.
Foreign Currency Exposure
The fair values of the Company’s monetary items that have currency exposure at 30 April are shown below. Where the Company’s investments (which are not monetary items) are priced in a foreign currency they have been included separately in the analysis so as to show the overall level of exposure.
Year ended 30 April 2026
| Foreign | Investments | |||||
| Debtors | currency | at fair | ||||
| (due from | exposure | value | Total net | |||
| brokers | Cash and | Overdrafts | on net | through | foreign | |
| and | cash | and bank | monetary | profit | currency | |
| dividends) | equivalents | facility | items | or loss | exposure | |
| Currency | £’000 | £’000 | £’000 | £’000 | £’000 | £’000 |
| Australian dollar | – | – | – | – | 38,554 | 38,554 |
| Chinese yuan | – | – | – | – | 41,378 | 41,378 |
| Hong Kong dollar | – | – | – | – | 258,020 | 258,020 |
| Indian rupee | – | – | – | – | 62,396 | 62,396 |
| Indonesian rupiah | 645 | – | – | 645 | 38,100 | 38,745 |
| Singapore dollar | 429 | – | – | 429 | 21,847 | 22,276 |
| South Korean won | 170 | 25 | - | 195 | 151,659 | 151,854 |
| Swiss franc | 21 | – | – | 21 | – | 21 |
| Taiwan dollar | 438 | – | – | 438 | 228,828 | 229,266 |
| Thai baht | 1,582 | – | – | 1,582 | 35,617 | 37,199 |
| US dollar | 203 | 2,405 | (35,973) | (33,365) | 100,975 | 67,610 |
| Vietnamese dong | – | – | – | – | 7,973 | 7,973 |
| 3,488 | 2,430 | (35,973) | (30,055) | 985,347 | 955,292 |
Year ended 30 April 2025
| Foreign | Investments | |||||
| Debtors | currency | at fair | ||||
| (due from | exposure | value | Total net | |||
| brokers | Cash and | Overdrafts | on net | through | foreign | |
| and | cash | and bank | monetary | profit | currency | |
| dividends) | equivalents | facility | items | or loss | exposure | |
| Currency | £’000 | £’000 | £’000 | £’000 | £’000 | £’000 |
| Australian dollar | – | – | – | – | 8,473 | 8,473 |
| Chinese yuan | – | – | – | – | 39,164 | 39,164 |
| Hong Kong dollar | – | – | – | – | 236,204 | 236,204 |
| Indian rupee | – | – | – | – | 78,504 | 78,504 |
| Indonesian rupiah | – | – | – | – | 43,747 | 43,747 |
| Singapore dollar | 632 | – | – | 632 | 18,694 | 19,326 |
| South Korean won | 331 | – | – | 331 | 109,562 | 109,893 |
| Swiss franc | 20 | – | – | 20 | – | 20 |
| Taiwan dollar | 185 | – | – | 185 | 111,913 | 112,098 |
| Thai baht | 1,291 | – | – | 1,291 | 28,507 | 29,798 |
| US dollar | 125 | 2,021 | (43,923) | (41,777) | 74,267 | 32,490 |
| Vietnamese Dong | – | – | – | – | 7,795 | 7,795 |
| 2,584 | 2,021 | (43,923) | (39,318) | 756,830 | 717,512 |
The amounts shown are not representative of the exposure to risk during the year, because the levels of foreign currency exposure change significantly throughout the year.
Foreign Currency Sensitivity
The following table illustrates the sensitivity of the returns after taxation for the year with respect to the Company’s financial assets and liabilities.
If sterling had strengthened by the amounts shown in the second table below, the effect on the assets and liabilities held in non-sterling currency would have been as follows:
| 2026 | 2025 | |||||
| Total | Total | |||||
| Revenue | Capital | loss | Revenue | Capital | loss | |
| return | return | after tax | return | return | after tax | |
| Currency | £’000 | £’000 | £’000 | £’000 | £’000 | £’000 |
| Australian dollar | (9) | (1,272) | (1,281) | (3) | (237) | (240) |
| Chinese yuan | (35) | (828) | (863) | (11) | (666) | (677) |
| Hong Kong dollar | (61) | (3,354) | (3,415) | (39) | (4,960) | (4,999) |
| Indian rupee | (25) | (1,934) | (1,959) | (5) | (1,727) | (1,732) |
| Indonesian rupiah | (54) | (686) | (740) | (45) | (1,225) | (1,270) |
| Singapore dollar | (8) | (153) | (161) | (8) | (187) | (195) |
| South Korean won | (66) | (4,399) | (4,465) | (47) | (3,068) | (3,115) |
| Taiwan dollar | (81) | (6,178) | (6,259) | (22) | (2,014) | (2,036) |
| Thai baht | (43) | (605) | (648) | (47) | (969) | (1,016) |
| US dollar | (29) | (741) | (770) | 927 | (1,678) | (751) |
| Vietnamese dong | (7) | – | (7) | (3) | (171) | (174) |
| (418) | (20,150) | (20,568) | 697 | (16,902) | (16,205) | |
If sterling had weakened by the same amounts, the effect would have been the converse.
The following movements in the assumed exchange rates are used in the above sensitivity analysis:
| 2026 | 2025 | |
| % | % | |
| £/Australian dollar | +/–3.3 | +/–2.8 |
| £/Chinese yuan | +/–2.0 | +/–1.7 |
| £/Hong Kong dollar | +/–1.3 | +/–2.1 |
| £/Indian rupee | +/–3.1 | +/–2.2 |
| £/Indonesian rupiah | +/–1.8 | +/–2.8 |
| £/Singapore dollar | +/–0.7 | +/–1.0 |
| £/South Korean won | +/–2.9 | +/–2.8 |
| £/Swiss franc | +/–1.8 | – |
| £/Taiwan dollar | +/–2.7 | +/–1.8 |
| £/Thai baht | +/–1.7 | +/–3.4 |
| £/US dollar | +/–1.1 | +/–2.2 |
| £/Vietnamese dong | +/–1.0 | +/–2.2 |
These percentages have been determined based on the market volatility in exchange rates during the year. The sensitivity analysis is based on the Company’s foreign currency financial instruments held at each balance sheet date. The effect of the strengthening or weakening of sterling against foreign currencies is calculated by reference to the volatility of exchange rates during the year using one standard deviation of currency fluctuations from the average exchange rate.
In the opinion of the Directors, the above sensitivity analyses are not representative of the year as a whole since the level of foreign currency exposure varies.
16.1.2 Interest Rate Risk
The Company is exposed to interest rate risk through income receivable on cash deposits and interest payable on variable rate borrowings. When the Company has cash balances, they are held in variable rate bank accounts yielding rates of interest dependent on the base rate of the custodian, Bank of New York Mellon (International) Limited.
The Company has a revolving credit facility (the ‘bank facility’) for which details and year end drawn down amounts are shown in note 11. The Company uses the facility when required at levels approved and monitored by the Board. At the maximum possible gearing of £80 million, the effect of a 3.5% increase/decrease in the interest rate would result in a decrease/increase to the Company’s total income of £2,800,000. At the year end, US dollars with a sterling equivalent of £35,973,000 of the bank facility was drawn down (2025: £43,923,000).
The Company also has available an uncommitted bank overdraft arrangement with the custodian for settlement purposes. At the year end, there was a sterling overdraft of £435,000 (2025: sterling overdraft of £nil). Interest on the bank overdraft is payable at the custodian’s variable rate.
The Company’s portfolio is not directly exposed to interest rate risk.
16.1.3 Other Price Risk
Other price risks (i.e. changes in market prices other than those arising from interest rate risk or currency risk) may affect the value of the equity investments, but it is the business of the Manager to manage the portfolio to achieve the best possible return.
The Directors manage the market price risks inherent in the investment portfolio by meeting regularly to monitor on a formal basis the Manager’s compliance with the Company’s stated objectives and policies and to review investment performance.
The Company’s portfolio is the result of the Manager’s investment process and as a result is not wholly correlated with the Company’s benchmark or the markets in which the Company invests. The value of the portfolio will not move in line with the markets but will move as a result of the performance of the shares within the portfolio.
If the value of the portfolio rose or fell by 10% at the balance sheet date, the profit after tax for the year would increase or decrease by £100.1 million (2025: £77.2 million) respectively.
16.2 Liquidity Risk
This is the risk that the Company may encounter difficulty in meeting its obligations associated with financial liabilities i.e. when realising assets or raising finance to meet financial commitments.
A lack of liquidity in the portfolio may make it difficult for the Company to realise assets at or near their purported value in the event of a forced sale. This is minimised as the majority of the Company’s investments comprise a diversified portfolio of readily realisable securities which can be sold to meet funding commitments as necessary, cash held and the bank facility provides for additional funding flexibility. The financial liabilities of the Company at the balance sheet date are shown in note 11.
Creditors: amounts falling due within one year are expected to become payable within less than three months and the Provision for deferred tax liability (Indian capital gains tax) will become payable upon realisation of taxable gains upon sale of relevant underlying Indian securities.
16.3 Credit Risk
Credit risk comprises the potential failure by counterparties to deliver securities which the Company has paid for, or to pay for securities which the Company has delivered; it includes but is not limited to: lost principal and interest, disruption to cash flows or the failure to pay interest.
Credit risk is minimised by using:
(a) only approved counterparties, covering both brokers and deposit takers;
(b) a custodian that operates under BASEL III guidelines. The Board reviews the custodian’s annual, externally audited, service organisation controls report and the Manager’s management of the relationship with the custodian. Following the appointment of a depositary, assets held at the custodian are covered by the depositary’s restitution obligation, accordingly the risk of loss is remote; and
(c) the Invesco Liquidity Funds plc – US Dollar, a money market fund, which is rated AAAm by Standard & Poor’s and AAAmmf by Fitch.
Cash balances are limited to a maximum of 5% of net assets with the custodian, 2.5% of net assets with any other deposit taker and a maximum of 6% of net assets in the Invesco Liquidity Funds plc. These limits are at the discretion of the Board and are reviewed on a regular basis. As at the year end, the sterling equivalent of £2,430,000 (2025: £2,400,000) was held at the custodian, in addition a balance had been held in Invesco Liquidity Funds plc during the year and the balance was £4,097,000 at the year end (2025: £nil).
17. Fair Value of Financial Assets and Financial Liabilities
‘Fair value’ in accounting terms is the amount at which an asset can be bought or sold in a transaction between willing parties, i.e. a market-based, independent measure of value. Under accounting standards there are three levels of fair value based on whether there is an active market (Level 1) or, if not, Levels 2 and 3 where other methods have been employed to establish a fair value. This note sets out the aggregate amount of the portfolio in each level, and why.
Financial assets and financial liabilities are either carried at their fair value (investments), or at a reasonable approximation of their fair value. The valuation techniques used by the Company are explained in the accounting policy note. FRS 102 sets out three fair value levels for the fair value for the hierarchy disclosures. Categorisation into a level is determined on the basis of the lowest level input that is significant to the fair value measurement of each relevant asset/liability.
The investments held by the Company at the year end are shown on pages 19 and 20. Except for three Level 2 investments described below, all of the Company’s investments at the year end were deemed to be Level 1 with fair values for all based on unadjusted quoted prices in active markets for identical assets totalling £961,685,000 (2025: £743,688,000).
Level 2 investments are investments for which inputs are other than quoted prices included within Level 1 that are observable (i.e. developed using market data). At the year end there were three Level 2 investments held with a total fair value of £39,714,000 (2025: £28,507,000), comprising of Kasikornbank, valued at £28,412,000 (2025: £28,507,000), Bangkok Dusit Medical Services valued at £7,205,000 (2025: not held) and Invesco Liquidity Funds – US Dollar money market fund £4,097,000 (2025: not held). Kasikornbank and Bangkok Dusit Medical Services are classified as Level 2 due to the less liquid nature of the foreign ownership lines of stock held, however both holdings are valued using observable market prices with potentially lower liquidity judged to be the most important factor in determining this designation.
There have been no transfers or movements between fair value categories during the year.
Level 3 investments are investments for which inputs are unobservable (i.e. for which market data is unavailable). There were no Level 3 investments held at the year end. (2025: one investment: Lime Co. valued at £34,000 based on prices of trades in the OTC market). In the prior year judgement was applied to determine that the OTC market will provide the best approximate value for this security.
18. Capital Management
This note is designed to set out the Company’s objectives, policies and processes for managing its capital. This capital being funded by monies invested in the Company by shareholders (both initial investment and retained amount) and any borrowings by the Company.
The Company’s total capital employed at 30 April 2026 was £1,002,073,000 (2025: £773,835,000) comprising borrowings of £36,408,000 (2025: £43,923,000) and equity share capital and other reserves of £965,665,000 (2025: £729,912,000).
The Company’s total capital employed is managed to achieve the Company’s investment objective and investment policy as set out on page 25. Borrowings may be used to provide gearing up to the lower of £80 million or 25% of net asset value. The Company’s policies and processes for managing capital were unchanged throughout the year and the preceding year.
The main risks to the Company’s investments are shown in the Directors’ Report under the ‘Principal and Emerging Risks and Uncertainties’ section on pages 28 to 32. These also explain that the Company is able to gear and that gearing will amplify the effect on equity of changes in the value of the portfolio.
The Board can also manage the capital structure directly since it has taken the powers, which it is seeking to renew, to issue and buy-back shares and it also determines dividend payments.
The Company is subject to externally imposed capital requirements with respect to the obligation and ability to pay dividends by section 1158 Corporation Tax Act 2010 and by the Companies Act 2006, respectively, and with respect to the availability of the bank facility, by the terms imposed by the lender, details of which are given in note 11. The Board regularly monitors, and the Company has complied with, these externally imposed capital requirements.
19. Contingencies, Guarantees and Financial Commitments
Any liabilities the Company is committed to honour, and which are dependent on future circumstances or events occurring, would be disclosed in this note if any existed.
There were no contingencies, guarantees or other financial commitments of the Company as at 30 April 2026 (2025: nil).
20. Related Party Transactions and Transactions with the Manager
A related party is a company or individual who has direct or indirect control or who has significant influence over the Company. Under accounting standards, the Manager is not a related party.
Under UK GAAP, the Company has identified the Directors as related parties. The Directors’ remuneration and interests have been disclosed on pages 51 and 52 with additional disclosure in note 4. No other related parties have been identified.
Details of the Manager's services and fees are disclosed in the Directors' Report on page 40 and in note 3.
21. Post Balance Sheet Events
Any significant events that occurred after the balance sheet date but before the signing of the balance sheet will be shown here.
There are no significant events after the end of the reporting period requiring disclosure.
Notice of Annual General Meeting
THIS NOTICE OF ANNUAL GENERAL MEETING IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION. If you are in any doubt as to what action to take, you should consult your stockbroker, solicitor, accountant or other appropriate independent professional adviser authorised under the Financial Services and Markets Act 2000. If you have sold or otherwise transferred all your shares in Invesco Asia Dragon Trust plc, please forward this document and the accompanying Form of Proxy to the person through whom the sale or transfer was effected, for transmission to the purchaser or transferee. Please note that each of the resolutions to be considered at the AGM will be voted on by way of a poll.
Notice is given that the Annual General Meeting of Invesco Asia Dragon Trust plc will be held at Chartered Accountants’ Hall, One Moorgate Place, London, EC2R 6EA, on 15 September 2026 at 12 noon for the following purposes:
Ordinary Business
To consider and, if thought fit, to pass the following resolutions all of which will be proposed as ordinary resolutions:
1. To receive and consider the Annual Financial Report for the year ended 30 April 2026.
2. To approve the Company’s Dividend Payment policy. This is an advisory vote.
3. To approve the Annual Statement and Report on Remuneration for the year ended 30 April 2026.
4. To approve the Directors’ Remuneration Policy as set out in the Annual Statement and Report on Remuneration for the year ended 30 April 2026.
5. To re-elect Vanessa Donegan as a Director of the Company.
6. To re-elect Myriam Madden as a Director of the Company.
7. To re-elect Sonya Rogerson as a Director of the Company.
8. To re-elect Matthew Dobbs as a Director of the Company.
9. To re-elect Susan Sternglass Noble as a Director of the Company.
10. To re-elect Nicole Yuen as a Director of the Company.
11. To re-appoint Ernst & Young LLP as auditor of the Company.
12. To authorise the Audit Committee to determine the remuneration of the auditor.
Special Business
To consider and, if thought fit, pass the following resolutions of which resolution 13 will be proposed as an ordinary resolution and resolutions 14 to 16 as special resolutions:
Authority to Allot Shares
13. That:
in substitution for any existing authority under section 551 of the Companies Act 2006 (the ‘Act’) but without prejudice to the exercise of any such authority prior to the date of this resolution the Directors of the Company be generally and unconditionally authorised in accordance with section 551 of the Act as amended from time to time prior to the date of the passing of this resolution, to exercise all powers of the Company to allot shares and grant rights to subscribe for, or convert any securities into, shares up to an aggregate nominal amount (within the meaning of sections 551(3) and (6) of the Act) of £l,992,092, this being 10% of the Company’s issued ordinary share capital as at 17 July 2026, such authority to expire at the conclusion of the next Annual General Meeting of the Company or the date 15 months after the passing of this resolution, whichever is the earlier unless the authority is renewed or revoked at any other general meeting prior to such time, but so that this authority shall allow the Company to make offers or agreements before the expiry of this authority which would or might require shares to be allotted, or rights to be granted, after such expiry as if the authority conferred by this resolution had not expired.
Disapplication of Pre-emption Rights
14. That:
subject to the passing of resolution number 13 set out in the notice of this meeting (the ‘Section 551 Resolution’) and in substitution for any existing authority under sections 570 and 573 of the Companies Act 2006 (the ‘Act’) but without prejudice to the exercise of any such authority prior to the date of this resolution, the Directors be and are hereby empowered, in accordance with sections 570 and 573 of the Act as amended from time to time prior to the date of the passing of this resolution to allot equity securities (within the meaning of section 560(1), (2) and (3) of the Act) for cash, either pursuant to the authority given by the Section 551 Resolution or (if such allotment constitutes the sale of relevant shares which, immediately before the sale, were held by the Company as treasury shares) otherwise, as if section 561 of the Act did not apply to any such allotment, provided that this power shall be limited:
(a) to the allotment of equity securities in connection with a rights issue in favour of all holders of a class of equity securities where the equity securities attributable respectively to the interests of all holders of securities of such class are either proportionate (as nearly as may be) to the respective numbers of relevant equity securities held by them or are otherwise allotted in accordance with the rights attaching to such equity securities (subject in either case to such exclusions or other arrangements as the Directors may deem necessary or expedient in relation to fractional entitlements or legal, regulatory or practical problems under the laws of, or the requirements of, any regulatory body or any stock exchange in any territory or otherwise); and
(b) to the allotment (otherwise than pursuant to a rights issue) of equity securities up to an aggregate nominal amount of £1,992,092, this being 10% of the Company’s issued share capital as at 17 July 2026 and this power shall expire at the conclusion of the next Annual General Meeting of the Company or the date 15 months after the passing of this resolution, whichever is the earlier unless the authority is renewed or revoked at any other general meeting prior to such time, but so that this power shall allow the Company to make offers or agreements before the expiry of this power which would or might require equity securities to be allotted after such expiry as if the power conferred by this Resolution had not expired; and so that words and expressions defined in or for the purposes of Part 17 of the Act shall bear the same meanings in this resolution.
Authority to Make Market Purchases of Shares
15. That:
the Company be generally and subject as hereinafter appears unconditionally authorised in accordance with Section 701 of the Companies Act 2006 as amended from time to time prior to the date of the passing of this resolution (the ‘Act’) to make market purchases (within the meaning of Section 693(4) of the Act) of its issued ordinary shares of 10p each in the capital of the Company (‘Shares’).
PROVIDED ALWAYS THAT:
(i) the maximum number of Shares hereby authorised to be purchased shall be 29,861,452 or 14.99% of shares in issue as at 17 July 2026;
(ii) the minimum price which may be paid for a Share shall be 10p;
(iii) the maximum price which may be paid for a Share must not be more than the higher of: (i) 5% above the average of the mid-market values of the Shares for the five business days before the purchase is made; and (ii) the higher of the price of the last independent trade in the Shares and the highest then current independent bid for the Shares on the London Stock Exchange;
(iv) any purchase of Shares will be made in the market for cash at prices below the prevailing net asset value per Share (as determined by the Directors);
(v) the authority hereby conferred shall expire at the conclusion of the next Annual General Meeting of the Company, or the date 15 months after the passing of this resolution, whichever is the earlier, unless the authority is renewed or revoked at any other general meeting prior to such time;
(vi) the Company may make a contract to purchase Shares under the authority hereby conferred prior to the expiry of such authority which will be executed wholly or partly after the expiration of such authority and may make a purchase of Shares pursuant to any such contract; and
(vii) any shares so purchased shall be cancelled or, if the Directors so determine and subject to the provisions of Sections 724 to 731 of the Act and any applicable regulations of the United Kingdom Listing Authority, be held (or otherwise dealt with in accordance with Section 727 or 729 of the Act) as treasury shares.
Period of Notice Required for General Meetings
16. That:
the period of notice required for general meetings of the Company (other than AGMs) shall be not less than 14 days.
Dated this 21 July 2026
By order of the Board
Invesco Asset Management Limited
Corporate Company Secretary
Latest directors dealings
- 2 minutes ago Aurrigo International
- 26 minutes ago Savills
- 46 minutes ago Everyman Media Group
- 1 hour ago Croda International
- 2 hours ago Diageo