Half-year Report
Summary by AI BETAClose X
LONDON STOCK EXCHANGE ANNOUNCEMENT
SCHRODER ASIAPACIFIC FUND PLC
HALF YEAR REPORT
Schroder AsiaPacific Fund plc (the "Company") hereby submits its Half Year Report for the six months ended 31 March 2026 as required by the Financial Conduct Authority's Disclosure Guidance and Transparency Rule 4.2.
Key Highlights
· Asian equity markets delivered positive returns in sterling terms over the six months to 31 March 2026. The Company's NAV produced a total return of 3.7%, whilst the Benchmark's total return rose by 5.2% over the period.
· Asia continues to provide access to a diverse set of high-quality companies across multiple markets and sectors, with valuations that appear attractive relative to long-term growth prospects.
· The Company continued to be active in implementing its buyback policy, and the Board remains focused on managing discount volatility and helping to provide liquidity in the Company's shares.
The Half Year Report is also being published in hard copy format and an electronic copy of that document will shortly be available to download from the Company's web pages at www.schroders.co.uk/asiapacific.
The Company has submitted a copy of its Half Year Report to the National Storage Mechanism and it will shortly be available for inspection at https://data.fca.org.uk/#/nsm/nationalstoragemechanism.
Enquiries:
Schroder Investment Management Limited
|
Charlotte Banks / Kirsty Preston (Press) |
020 7658 2106 |
|
Natalia de Sousa (Company Secretarial) |
020 7658 6000 |
HALF YEAR REPORT FOR THE SIX MONTHS ENDED 31 MARCH 2026
Chair's Statement
I am pleased to present my first interim Statement as Chair of the Company, having succeeded James Williams following the Company's AGM in January 2026. On behalf of the Board, I would like to record our thanks to James for his service to the Company and its shareholders, initially as a non-executive Director and subsequently as Chair.
Performance
Asian equity markets delivered a positive return in sterling terms over the six months to 31 March 2026, despite a sharp sell off in March triggered by the outbreak of hostilities in the Middle East, which reversed much of the earlier gains.
The Company's NAV produced a total return of 3.7% over the six-month period, lagging the Benchmark's total return of 5.2% over the same period. Performance was concentrated in certain sectors and driven by continued, and stronger than expected investment in AI data centres. This propelled Information Technology stocks and led to exceptional returns in markets such as Korea and Taiwan, while energy stocks also benefited from higher oil prices. As a result, Asian equity performance outpaced global markets.
Further detail on performance and portfolio activity can be found in the Investment Manager's Review.
Gearing
The Company was 3.0% geared at the start of the period, and by 31 March 2026 this had marginally increased to 3.8%. The Board continues to keep gearing under consideration and the Manager has access to a revolving credit facility, which will be used when the Investment Manager believes that the use of borrowing will be accretive to returns.
Discount management
The Company continued to be active in buying back its own shares. A total of 6,142,399 shares were purchased for cancellation during the period at a cost of £42 million, adding 0.4% to the NAV. Since the end of the period, the Company has bought back an additional 1,144,304 shares.
The Board remains focused on managing discount volatility and helping to provide liquidity in the Company's shares. The Board continues to follow a flexible strategy towards discount management and considers that a discount under 10% is a sensible target over the longer term in normal market conditions. During the period, the Company's shares traded at an average discount of 9.3%.
Board succession
The Board was pleased to welcome John Lydon and Ian Cadby as independent non-executive Directors on 1 May and 13 May 2026, respectively.
John has over 30 years' experience in M&A, capital markets, strategic advisory and investment across Europe, Asia, and North America. He has held various leadership roles in the financial sector at J.P. Morgan, Deutsche Bank and Davy Group, and in the industrial sector at CRH plc. John is currently a Venture Partner at Princeville Capital, a leading global growth-stage technology investor.
Ian has over 35 years' asset management experience, including seven years in Asia where he ran multi-asset portfolios. Formerly Chief Executive Officer and Chief Investment Officer of Liberty Ermitage Ltd, he brings deep expertise in board strategy & governance, derivative trading, and risk management. He has over 10 years' experience on investment trust boards, including as Chair of Aberdeen Asian Income Fund Ltd (until 12 May 2026) and remains Senior Independent Director of CQS New City High Yield Fund Ltd.
Both John and Ian will be put forward for election at the 2027 Annual General Meeting.
Portfolio management arrangements
The Board notes a refinement to the Company's portfolio management arrangements. Abbas Barkhordar will act as Lead Portfolio Manager, with Richard Sennitt as Alternate Portfolio Manager. Both will continue to work closely together, supporting continuity in oversight, decision-making and the application of the Company's established investment approach.
Schroders combination with Nuveen
On 12 February 2026, the Board of Schroders plc announced that it had agreed terms of a recommended cash acquisition by Nuveen LLC, to combine the two businesses. The transaction is not expected to complete until Q4 2026.
The Board of Schroder AsiaPacific Fund plc has been informed that Nuveen's intention is to maintain continuity across Schroders' existing investment and client-facing functions, and the Board will monitor progress in this regard.
Further details are available on the Schroders website: https://www.schroders.com/en/global/indivi dual/nuveenoffer/.
Outlook
The Board recognises that global equity markets face a more uncertain outlook as geopolitical risks and late cycle dynamics converge. While AI-driven investment has underpinned recent earnings and market gains, it has become increasingly concentrated and exposed to a potential cyclical correction, and the Iran conflict has introduced a material macro risk via sharply higher energy prices. Valuations across Asian markets are above long-term averages, reflecting stronger sentiment and confidence in the region's outlook. This supports a broadening earnings recovery with companies showing resilience despite some energy-related headwinds. Overall, sustained earnings growth remains the key driver for continued performance.
From a longer term perspective, we agree with our Portfolio Manager that Asia continues to offer access to a diverse set of high-quality companies across multiple markets and sectors, many of which trade at attractive valuations relative to their growth potential.
Our investment approach remains focused on building a differentiated portfolio of the most compelling long-term opportunities across the region.
Nicky Richards
Chair
1 June 2026
Portfolio Manager Review
The six months to the end of March 2026 were volatile for Asian equity markets, with particularly sharp moves in the final month following the outbreak of war in the Middle East. For most of the period returns were strong, driven by continued global investment in Artificial Intelligence (AI) data centres. However, the escalation of the conflict in March unwound a significant portion of earlier gains. By the end of the period, Asian equities, as measured by the Benchmark Index were up around 5% in sterling terms, still outperforming global equity markets, which returned less than 2% over the same six months.
As in recent years, headline returns masked substantial divergence across countries and sectors. Information Technology (IT) was the standout sector, reflecting the strength of the AI investment cycle, which disproportionately benefited the IT heavy markets, Korea and Taiwan. Thailand also performed well, supported by a more decisive-than-expected election outcome and its index exposure to IT and energy stocks, the latter benefiting from higher oil and gas prices following the escalation of Middle East tensions. Outside of IT, energy and industrials, returns were far more subdued. Whereas Korea rose by over 50% during the period, several markets, including China and India, delivered double digit negative returns.
This uneven pattern of returns has further increased market concentration across the region, with a narrow set of themes - notably AI, defence and energy - accounting for the vast majority of positive performance. As a result, regional indices have become increasingly dominated by a small number of large stocks, with a declining proportion of constituents outperforming the market.
The scale of capital investment in AI data centres, which is already large, has continued to grow above market expectations. Spending has been led by large US technology companies, including established hyperscale cloud providers and internet platforms (Microsoft, Amazon, Google and Meta), alongside newer entrants such as Oracle and specialist "neocloud" providers. Earlier concerns around the sustainability of this spending have moderated as AI-related revenues have begun to accelerate for both data centre operators and the AI model developers, including OpenAI and Anthropic.
This spending ultimately translates into revenue for Asian technology hardware companies, which occupy critical positions in the AI supply chain. Taiwan Semiconductor Manufacturing Company (TSMC) remains the only manufacturer capable of mass producing leading-edge AI chips, such as those designed by Nvidia, Google and Amazon, while Korean companies Samsung Electronics and SK Hynix dominate advanced memory production. Beyond these well-known names, a broader ecosystem of Asian firms supplies essential components and services, including power management (Delta Electronics), chip design (MediaTek), packaging and testing (ASE Technology) and server assembly (Hon Hai).
Demand for AI-related components has proven largely unresponsive to price changes, reflecting the financial strength of the major US buyers, each willing to spend whatever is required to keep at the cutting-edge of this fast-evolving technology. At the same time, supply has remained relatively concentrated and disciplined. This combination has driven sharp increases in profitability across parts of the supply chain and has contributed to rising prices for key inputs, including commodity memory chips.
Not all sectors benefitted from the rapid adoption of AI. Share prices of software, IT services and certain internet platform companies were weak during the period as advances in AI capability raised questions over the long-term sustainability of existing business models. In particular, IT services companies such as Infosys, which provide relatively cheap software programming labour to companies in developed markets, came under pressure as they face existential risk from AI models which can now generate sophisticated code almost instantaneously and at low marginal cost. Similar concerns affected online platforms where AI agents may increasingly control customer acquisition, potentially weakening pricing power - including in areas such as online travel agents (OTAs), recruitment, marketplaces, classifieds, ride-hailing and delivery services. The Company's exposure to such companies was a drag on performance in markets such as India and China.
The most significant macroeconomic headwind during the period was the escalation of conflict in the Middle East from late February. Damage to energy infrastructure across the Persian Gulf and disruption to shipping through the Strait of Hormuz led to sharply higher oil and gas prices. Few economies or stocks in Asia stand to benefit from higher energy prices, and many Asian countries are heavily reliant on imported energy. The conflict is therefore a clear negative for the region, exacerbating inflationary pressures and weakening external balances. Higher energy prices also contributed to rising US inflation expectations and interest rate pressures, a backdrop that has historically been challenging for Asian equity markets.
Higher energy costs weighed on returns in India, Indonesia and the Philippines, where domestic economic momentum was already subdued. China's economy has also remained weak overall, with growth increasingly reliant on exports which have proved surprisingly resilient. In February, a US Supreme Court ruling struck down several tariffs imposed under International Emergency Economic Powers Act. While the administration signalled its intention to pursue alternative measures, these are more constrained (and in some cases time-limited), complicating the administration's negotiation position with trade partners. Despite this renewed policy uncertainty, investors have broadly welcomed the reduced scope for abrupt trade escalation compared with last year.
Performance
Over the six months to 31 March 2026, the Company's net asset value per share delivered a total return of +3.7%, lagging the MSCI All Country Asia ex Japan Index, which rose +5.2% over the same period.
Source: Schroders, Morningstar, GBP, cum income fair NAV.
Our underweight positions in China and India were positive contributors at an asset allocation level but were more than offset by negative stock selection, primarily within internet platform holdings. In China, detractors included OTA trip.com, music streaming service Tencent Music Entertainment, online recruitment platform Kanzhun, and social network giant Tencent, while in India OTA MakeMyTrip was the principal drag. Singapore-listed ride-hailing and local delivery platform Grab also underperformed. These disparate businesses experienced share price declines of between 25% and 60% during the period due to the same AI disruption concerns.
At this early stage of AI adoption, the risk of permanent value impairment remains difficult to assess. Investors have tended to price disruption risk aggressively, rather than wait for clarity on business model resilience. Our focus remains on platforms with distinct competitive advantages, such as proprietary datasets or physical logistics infrastructure, that should retain the ability to generate acceptable returns even if customer access channels evolve towards AI apps or 'agents'. We have historically liked the returns these kinds of companies can generate due to strong network effects and low capital intensity; it is unclear to what extent these characteristics will be eroded by the emerging technology, and it is a risk we continue to monitor closely.
Our underweight to Korea was a modest headwind, although this was largely offset by positive stock selection, notably Samsung Electronics and Samsung Electro Mechanics (SEMCO). The portfolio's overweight to IT, combined with favourable stock selection, supported relative returns. Additional positive contributors included our off-benchmark holding in Rio Tinto, and stock selection in Singapore, driven by Singtel and banks DBS and OCBC.
Portfolio activity
Five new positions were initiated during the period.
• PB Fintech, operator of India's leading online insurance distribution platform PolicyBazaar, offers exposure to a long runway of growth as health and life insurance penetration increases alongside rising incomes and demographic change.
• In Korea, holdings were added in Samsung C&T, which trades at a significant discount to net asset value and stands to benefit from improved capital allocation and higher dividend payouts, and Samsung Electro Mechanics, a key supplier of Multi-Layer Ceramic Capacitors (MLCCs) and semiconductor substrates, both of which are benefiting from strong AI-related demand and constrained industry capacity.
• Full Truck Alliance was added for its online freight matching platform in China, which should continue to displace traditional brokers through superior efficiency, lower commission rates and strong network effects.
• Sea Ltd provides exposure to leading e-commerce, gaming and fintech franchises across Southeast Asia and Brazil, underpinned by a strong logistics platform and a proven operational track record.
Several holdings were exited. In India, ICICI Bank and Infosys were sold amid deteriorating macro conditions and heightened AI disruption risk, respectively. In China, Meituan and Anta Sports were sold due to rising competitive pressures and a weak domestic consumption outlook. In ASEAN, profits were taken in Singapore Exchange, and Thai hospital exposure was consolidated into Bumrungrad Hospital by selling out of Bangkok Dusit Medical Services. We also sold our holding in the Vietnam Enterprise Investments Ltd investment trust, preferring direct stock exposure in Vietnam, and sold our remaining holding in BHP after strong performance.
Portfolio strategy
The portfolio remains focused on Taiwan, China, Korea, Hong Kong, Singapore, India and select ASEAN markets, with net gearing of 3.8%.
We remain overweight Taiwan, where exposure is concentrated in high-quality IT companies which are increasingly benefiting from AI-related capital expenditure. TSMC remains a significant holding, reflecting its dominant position in advanced semiconductor manufacturing and its critical role in enabling AI and other high performance computing applications.
We are underweight South Korea despite strong recent performance driven by earnings upgrades, valuation re-rating and governance reforms. While structural demand drivers exist across sectors such as technology, defence and shipbuilding, valuations now limit further upside in our view given the cyclical nature of most of these industries.
Our underweight to China reflects ongoing structural concerns, including adverse demographics, weak domestic demand and governance issues within state-owned enterprises. While exports have proven resilient, we believe further stimulus is unlikely to resolve deeper economic imbalances, such as excessive household savings rates.
In contrast to our position in China, we remain overweight Hong Kong, where valuations are more attractive, corporate governance and capital allocation discipline is stronger, and the market continues to play a central role in capital flows into and out of China, with many new listings on the local stock exchange.
In Southeast Asia, Singapore remains our largest exposure, benefiting from its role as a regional financial hub. Exposure to smaller ASEAN markets is more selective, despite attractive valuations, given sensitivity to trade restrictions, capital flows and energy prices. Domestic policy concerns continue to weigh on these markets as well, particularly in Indonesia. Vietnam remains an off-benchmark holding due to its long-term structural growth potential, despite near term macro risks.
India has become more attractive following recent underperformance, though remains relatively expensive in a regional context. Energy import dependence is a headwind while Gulf energy supplies are disrupted, but the long-term outlook for India remains positive, with a relatively young, growing population and rising incomes supporting stronger domestic consumption. As valuations fall, we continue to look for opportunities to buy well-governed, high-return businesses.
IT remains an overweight, supported by strong structural demand and high barriers to entry formed by decades of capital investment and R&D spending. After strong performance, valuations are now elevated and selectivity is increasingly important given sensitivity to any slowdown in AI-related capital expenditure. For now, however, there is little sign of such a slowdown and, in our view, technology remains one of the most structurally attractive sectors for long-term investors in the region to have exposure to.
We remain slightly overweight Financials, focusing on well-capitalised banks, insurers and exchanges, particularly in mature markets such as Singapore where valuations and dividend yields remain attractive. Interest rate direction will be a key driver of performance across the sector.
Investment outlook
At the time of writing, two issues dominate the outlook for Asian investors: the sustainability of the AI investment cycle and the duration of the conflict involving Iran. The latter has become the more immediate concern. The near closure of the Strait of Hormuz, through which roughly 20% of global oil and LNG flows, alongside damage to Gulf production and export infrastructure, has driven a sharp increase in energy prices.
Most Asian economies are large net energy importers with significant reliance on Gulf supplies, meaning a prolonged conflict risks higher inflation, weaker growth and pressure on external balances. That said, many countries now enter this period with stronger external positions and positive real interest rates than in previous cycles, providing a greater degree of resilience. Even so, growing concerns around energy availability have already led some governments to introduce energy saving measures, including working from home arrangements for public sector employees.
The key question for markets is the duration of the conflict - if tanker traffic resumes quickly, the impact should be manageable. A prolonged disruption, however, would materially increase risks for both the region and the global economy. Based on energy dependence and macro buffers, India, the Philippines, Thailand and Vietnam appear among the more vulnerable Asian economies should high oil prices persist. In contrast, wealthier economies such as Taiwan and Korea benefit from strategic reserves, fiscal capacity to subsidise energy costs, and lower energy intensity relative to GDP. While there are no clear beneficiaries in Asia, China appears relatively better placed given its lower reliance on Gulf energy supplies and a more diversified energy mix.
In the short-term, the Middle East conflict has overshadowed what remains a critical medium-term issue for Asian equities as an asset class: the durability of the global AI investment boom. Capital expenditure by large US technology companies continues at pace as data centre capacity is expanded, and forecasts have recently been revised upwards as cloud revenues show signs of acceleration. Nevertheless, returns on this investment remain under close scrutiny.
The semiconductor sector, while enjoying strong structural growth, remains cyclical. Supply dynamics - particularly in memory - are therefore a growing focus. Capacity additions over the next year are limited, with little meaningful new supply expected before the second half of 2027. However, past cycles suggest that supply responses can be brought forward, and equity markets typically anticipate this. Elevated pricing also risks curbing demand in more mature and price sensitive end markets such as smartphones, PCs and tablets. Taken together, these factors heighten the risk of a sharp correction once the AI investment cycle turns, particularly given the significant expansion in both earnings expectations and valuation multiples in recent years.
While AI-related spending has been a tailwind for Asia, investor attention has increasingly shifted towards potential losers from AI-driven disruption. Several businesses perceived to be at risk of disintermediation have already de-rated materially, and this overhang is likely to persist until the impact on profitability becomes clearer. In response, our focus remains on companies with durable competitive advantages that we believe can continue to generate attractive returns even as business models evolve.
From a regional perspective, the outlook for China remains a key determinant for broader Asian growth. We expect economic growth to remain subdued, with external strength continuing to offset weak domestic demand. While further stimulus has been anticipated, policy remains focused on reducing excess capacity and competitive pressures rather than aggressive demand support. Encouragingly, geopolitical tensions with the US appear to have eased somewhat, with selective tariffs and restrictions relaxed on both sides.
Much of the strong Asian market performance in recent months has been narrowly focused on certain themes, rather than reflecting a broad‑based recovery in earnings. This has pushed valuations higher, and the market now trades above long‑term averages on most metrics. That said, the region as a whole remains attractively valued relative to developed markets.
Looking ahead, sustained earnings delivery will need to play a greater role in supporting equity returns. Prior to recent Middle East developments, there were early signs that earnings growth was beginning to broaden beyond a small group of AI beneficiaries. The duration of the conflict will be critical in determining whether this trend can continue.
Conclusion
Despite increased volatility following the outbreak of the Middle East conflict, Asian equity markets have continued to deliver positive returns, extending the strong performance of recent years. With valuations now above long-term averages, continued market progress will require sustained and more broadly based earnings growth. At present, earnings momentum remains concentrated in a narrow set of AI-related names. Although some broadening had begun, a prolonged conflict involving Iran would increasingly pressure growth across the region through higher energy costs and inflation. The outlook for markets can therefore best be described as positive, but fragile, with an uncomfortable reliance on a single thematic driver.
Asia continues to offer access to a diverse set of high-quality companies across multiple markets and sectors, many of which trade at attractive valuations relative to their growth potential. Our investment approach remains focused on building a differentiated portfolio of the most compelling long-term opportunities across the region.
Abbas Barkhordar
Portfolio Manager
Schroder Investment Management Limited
1 June 2026
Investment Portfolio
At 31 March 2026
|
|
Sector |
£'000 |
% |
|
Taiwan |
|
|
|
|
TSMC |
Information Technology |
159,667 |
16.6 |
|
Hon Hai Precision Industry |
Information Technology |
23,966 |
2.5 |
|
ASE Technology |
Information Technology |
23,851 |
2.5 |
|
MediaTek |
Information Technology |
21,382 |
2.2 |
|
Delta Electronics |
Information Technology |
20,841 |
2.2 |
|
E Ink |
Information Technology |
8,337 |
0.9 |
|
Nien Made Enterprise |
Consumer Discretionary |
7,542 |
0.8 |
|
Total Taiwan |
|
265,586 |
27.7 |
|
China |
|
|
|
|
Tencent Holdings1 |
Communication Services |
64,308 |
6.7 |
|
Contemporary Amperex Technology A |
Industrials |
21,538 |
2.2 |
|
Alibaba1 |
Consumer Discretionary |
14,729 |
1.5 |
|
Shenzhen Inovance Technology A |
Industrials |
13,427 |
1.4 |
|
NetEase1 |
Communication Services |
12,592 |
1.3 |
|
Midea1 (including A shares) |
Consumer Discretionary |
11,921 |
1.2 |
|
Centre Testing International A |
Industrials |
11,142 |
1.2 |
|
Trip.com1 |
Consumer Discretionary |
10,296 |
1.1 |
|
Shenzhou International1 |
Consumer Discretionary |
9,845 |
1.0 |
|
Sany Heavy Industry1 |
Industrials |
9,340 |
1.0 |
|
Full Truck Alliance ADR2 |
Industrials |
8,927 |
0.9 |
|
Tencent Music Entertainment ADR2 |
Communication Services |
8,361 |
0.9 |
|
Kanzhun ADR2 |
Industrials |
7,337 |
0.8 |
|
Total China |
|
203,763 |
21.2 |
|
|
|
|
|
|
South Korea |
|
|
|
|
Samsung Electronics (including preference shares) |
Information Technology |
96,399 |
10.0 |
|
Kia |
Consumer Discretionary |
11,645 |
1.2 |
|
Samsung C&T |
Industrials |
9,954 |
1.0 |
|
Samsung Electro-Mechanics |
Information Technology |
9,884 |
1.0 |
|
Total South Korea |
|
127,882 |
13.2 |
|
Hong Kong (SAR) |
|
|
|
|
AIA |
Financials |
34,918 |
3.6 |
|
Hong Kong Exchanges and Clearing |
Financials |
22,311 |
2.3 |
|
Techtronic Industries |
Industrials |
11,928 |
1.2 |
|
BOC Hong Kong |
Financials |
11,350 |
1.2 |
|
Swire Properties |
Real Estate |
10,610 |
1.1 |
|
Galaxy Entertainment |
Consumer Discretionary |
9,669 |
1.0 |
|
Samsonite International |
Consumer Discretionary |
9,346 |
0.9 |
|
Total Hong Kong (SAR) |
|
110,132 |
11.3 |
|
Singapore |
|
|
|
|
DBS |
Financials |
23,445 |
2.4 |
|
OCBC |
Financials |
20,970 |
2.2 |
|
Singapore Telecommunications |
Communication Services |
15,020 |
1.6 |
|
Sea ADR2 |
Consumer Discretionary |
9,127 |
0.9 |
|
Grab2 |
Industrials |
8,509 |
0.9 |
|
Total Singapore |
|
77,071 |
8.0 |
|
India |
|
|
|
|
HDFC Bank |
Financials |
22,204 |
2.3 |
|
PB Fintech |
Financials |
10,164 |
1.1 |
|
Apollo Hospitals Enterprise |
Healthcare |
9,609 |
1.0 |
|
Reliance Industries |
Energy |
9,536 |
1.0 |
|
InterGlobe Aviation |
Industrials |
8,597 |
0.9 |
|
Oberoi Realty |
Real Estate |
8,333 |
0.9 |
|
MakeMyTrip2 |
Consumer Discretionary |
7,221 |
0.7 |
|
Total India |
|
75,664 |
7.9 |
|
|
|
|
|
|
Philippines |
|
|
|
|
ICTSI |
Industrials |
10,103 |
1.0 |
|
Bank of the Philippine Islands |
Financials |
8,814 |
0.9 |
|
Ayala Land |
Real Estate |
6,712 |
0.7 |
|
Total Philippines |
|
25,629 |
2.6 |
|
Thailand |
|
|
|
|
Bumrungrad Hospital |
Healthcare |
10,482 |
1.1 |
|
Kasikornbank NVDR |
Financials |
10,158 |
1.1 |
|
Total Thailand |
|
20,640 |
2.2 |
|
Vietnam |
|
|
|
|
Mobile World Investment |
Consumer Discretionary |
10,283 |
1.1 |
|
FPT |
Information Technology |
9,168 |
1.0 |
|
Total Vietnam |
|
19,451 |
2.1 |
|
Australia |
|
|
|
|
Rio Tinto3 |
Materials |
16,182 |
1.7 |
|
Total Australia |
|
16,182 |
1.7 |
|
Indonesia |
|
|
|
|
Bank Mandiri |
Financials |
9,343 |
0.9 |
|
Total Indonesia |
|
9,343 |
0.9 |
|
|
|
|
|
|
Collective Investment Funds |
|
|
|
|
United Kingdom |
|
|
|
|
Schroder Asian Discovery Fund Z Accumulation4 |
Investment Fund |
11,470 |
1.2 |
|
Total United Kingdom |
|
11,470 |
1.2 |
|
Total Collective Investment Funds |
|
11,470 |
1.2 |
|
|
|
|
|
|
Total Investments5 |
|
962,813 |
100.0 |
Investments are classified by the Investment Manager in the region or country of their main business operations or listing.
Highlighted stocks are the twenty largest investments, which by value account for 67.6% of total investments (30 September 2025: 63.6% and 31 March 2025: 64.5%).
1Listed in Hong Kong. 2Listed in the USA. 3Listed in the United Kingdom. 4Predominantly invested in Asia. 5Total investments comprises the following:
|
|
|
£'000 |
% |
|
Equities, including ADRs and NVDRs |
|
917,078 |
95.2 |
|
Collective investment funds |
|
11,470 |
1.2 |
|
Preference shares |
|
34,265 |
3.6 |
|
Total Investments |
|
962,813 |
100.0 |
Investments are classified by the Investment Manager in the region or country of their main business operations or listing.
The following abbreviations have been used above: ADR: American Depositary Receipt NVDR: Non-Voting Depositary Receipt.
Interim Management Statement
Principal risks and uncertainties
The principal risks associated with the Company's business fall into the following risk categories: strategy and competitiveness; investment management (including climate change); market; geopolitical; gearing and leverage; accounting, legal and regulatory change; and third-party services (including custody, depository and cyber security). A detailed explanation of the risks in each of these categories can be found on pages 41 to 44 and in note 20 on pages 82 to 86 of the Company's published Annual Report and Financial Statements for the year ended 30 September 2025.
In the view of the Board, the Company's principal risks and uncertainties have not changed during the six months ended 31 March 2026. However, the Board considers that the severity of some of the risks has increased. While assessing the financial statements, the Board noted that the outbreak of war in the Middle East, has contributed to heightened inflation expectations and concerns about slower global growth, which may adversely affect market sentiment. These matters will be closely monitored and reported on in the next Annual Report, as appropriate.
Going concern
Having assessed the principal risks and uncertainties, and the other matters discussed in connection with the viability statement as set out on page 45 of the published Annual Report and Financial Statements for the year ended 30 September 2025, the Directors consider it appropriate to adopt the going concern basis in preparing the financial statements.
Related party transactions
There have been no transactions with related parties that have materially affected the financial position or the performance of the Company during the six months ended 31 March 2026.
Directors' responsibility statement
The Directors confirm that, to the best of their knowledge:
- the condensed set of financial statements contained within the Half Year Report has been prepared in accordance with United Kingdom Generally Accepted Accounting Practice, specifically adhering to Financial Reporting Standard 104 "Interim Financial Reporting" and the Statement of Recommended Practice, "Financial Statements of Investment Companies and Venture Capital Trusts" issued in July 2022; and
- the Interim Management Report, together with the Chair's Statement and Portfolio Manager Review includes a fair review of the information required by the Disclosure Guidance and Transparency Rules 4.2.7R and 4.2.8R.
The Half Year Report has not been reviewed or audited by the Company's auditor.
The Half Year Report for the six months ended 31 March 2026 was approved by the Board and the above Responsibility Statement has been signed on its behalf.
Nicky Richards
Chair
For and on behalf of the Board
1 June 2026
Income Statement
for the six months ended 31 March 2026 (unaudited)
|
|
(Unaudited) |
(Unaudited) |
(Audited) |
|||||||
|
|
For the six months |
For the six months |
For the year |
|||||||
|
|
ended 31 March |
ended 31 March |
ended 30 September |
|||||||
|
|
|
2026 |
2026 |
2026 |
2025 |
2025 |
2025 |
2025 |
2025 |
2025 |
|
|
|
Revenue |
Capital |
Total |
Revenue |
Capital |
Total |
Revenue |
Capital |
Total |
|
|
Note |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
|
Gains/(Losses) on investments |
|
|
|
|
|
|
|
|
|
|
|
held at fair value through profit or loss |
|
- |
27,773 |
27,773 |
- |
(34,203) |
(34,203) |
- |
110,620 |
110,620 |
|
Net foreign currency (losses)/gains |
|
- |
(629) |
(629) |
- |
(1,685) |
(1,685) |
- |
83 |
83 |
|
Income from investments |
|
7,310 |
144 |
7,454 |
6,307 |
152 |
6,459 |
23,600 |
302 |
23,902 |
|
Other income |
|
- |
- |
- |
1 |
- |
1 |
- |
- |
- |
|
Other interest receivable and similar income |
|
69 |
- |
69 |
58 |
- |
58 |
145 |
- |
145 |
|
Gross return/(loss) |
|
7,379 |
27,288 |
34,667 |
6,366 |
(35,736) |
(29,370) |
23,745 |
111,005 |
134,750 |
|
Investment management fee |
|
(734) |
(2,203) |
(2,937) |
(737) |
(2,211) |
(2,948) |
(1,445) |
(4,333) |
(5,778) |
|
Administrative expenses |
|
(670) |
- |
(670) |
(781) |
- |
(781) |
(1,553) |
- |
(1,553) |
|
Net return/(loss) before |
|
|
|
|
|
|
|
|
|
|
|
finance costs and taxation |
|
5,975 |
25,085 |
31,060 |
4,848 |
(37,947) |
(33,099) |
20,747 |
106,672 |
127,419 |
|
Finance costs |
|
(263) |
(791) |
(1,054) |
(223) |
(670) |
(893) |
(441) |
(1,323) |
(1,764) |
|
Net return/(loss) before |
|
|
|
|
|
|
|
|
|
|
|
taxation |
|
5,712 |
24,294 |
30,006 |
4,625 |
(38,617) |
(33,992) |
20,306 |
105,349 |
125,655 |
|
Taxation |
3 |
(786) |
3,342 |
2,556 |
(646) |
984 |
338 |
(1,850) |
(2,028) |
(3,878) |
|
Net return/(loss) after |
|
|
|
|
|
|
|
|
|
|
|
taxation |
|
4,926 |
27,636 |
32,562 |
3,979 |
(37,633) |
(33,654) |
18,456 |
103,321 |
121,777 |
|
Return/(loss) per share (pence) |
4 |
3.76 |
21.10 |
24.86 |
2.79 |
(26.41) |
(23.62) |
13.21 |
73.95 |
87.16 |
The "Total" column of this statement is the profit and loss account of the Company. The "Revenue" and "Capital" columns represent supplementary information prepared under guidance issued by The Association of Investment Companies. The Company has no other items of other comprehensive income, and therefore the net return after taxation is also the total comprehensive income for the period.
All revenue and capital items in the above statement derive from continuing operations. No operations were acquired or discontinued in the period.
Statement of Changes in Equity
for the six months ended 31 March 2026 (unaudited)
|
|
|
Called-up |
|
Capital |
Warrant |
|
|
|
|
|
|
share |
Share |
redemption |
exercise |
Capital |
Revenue |
|
|
|
|
capital |
premium |
reserve |
reserve |
reserves |
reserve |
Total |
|
|
Note |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
|
At 30 September 2025 |
|
13,398 |
100,956 |
6,746 |
8,704 |
799,898 |
22,948 |
952,650 |
|
Repurchase and cancellation of |
|
|
|
|
|
|
|
|
|
the Company's own shares |
|
(614) |
- |
614 |
- |
(42,247) |
- |
(42,247) |
|
Net return after taxation |
|
- |
- |
- |
- |
27,636 |
4,926 |
32,562 |
|
Dividend paid in the period |
5 |
- |
- |
- |
- |
- |
(17,052) |
(17,052) |
|
At 31 March 2026 |
|
12,784 |
100,956 |
7,360 |
8,704 |
785,287 |
10,822 |
925,913 |
|
for the six months ended 31 March 2025 (unaudited) |
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Called-up |
|
Capital |
Warrant |
|
|
|
|
|
|
share |
Share |
redemption |
exercise |
Capital |
Revenue |
|
|
|
|
capital |
premium |
reserve |
reserve |
reserves |
reserve |
Total |
|
|
Note |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
|
At 30 September 2024 |
|
14,659 |
100,956 |
5,485 |
8,704 |
767,036 |
22,319 |
919,159 |
|
Repurchase and cancellation of |
|
|
|
|
|
|
|
|
|
the Company's own shares |
|
(755) |
- |
755 |
- |
(41,081) |
- |
(41,081) |
|
Net (loss)/return after taxation |
|
- |
- |
- |
- |
(37,633) |
3,979 |
(33,654) |
|
Dividend paid in the period |
5 |
- |
- |
- |
- |
- |
(17,827) |
(17,827) |
|
At 31 March 2025 |
|
13,904 |
100,956 |
6,240 |
8,704 |
688,322 |
8,471 |
826,597 |
|
for the year ended 30 September 2025 (audited) |
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Called-up |
|
Capital |
Warrant |
|
|
|
|
|
|
share |
Share |
redemption |
exercise |
Capital |
Revenue |
|
|
|
|
capital |
premium |
reserve |
reserve |
reserves |
reserve |
Total |
|
|
Note |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
|
At 30 September 2024 |
|
14,659 |
100,956 |
5,485 |
8,704 |
767,036 |
22,319 |
919,159 |
|
Repurchase and cancellation of the Company's own shares |
|
(1,261) |
- |
1,261 |
- |
(70,459) |
- |
(70,459) |
|
Net return after taxation |
|
- |
- |
- |
- |
103,321 |
18,456 |
121,777 |
|
Dividend paid in the year |
5 |
- |
- |
- |
- |
- |
(17,827) |
(17,827) |
|
At 30 September 2025 |
|
13,398 |
100,956 |
6,746 |
8,704 |
799,898 |
22,948 |
952,650 |
Statement of Financial Position
at 31 March 2026 (unaudited)
|
|
|
(Unaudited) |
(Unaudited) |
(Audited) |
|
|
|
31 March |
31 March |
30 September |
|
|
|
2026 |
2025 |
2025 |
|
|
Note |
£'000 |
£'000 |
£'000 |
|
Fixed assets |
|
|
|
|
|
Investments held at fair value through profit or loss |
|
962,813 |
860,992 |
993,743 |
|
Current assets |
|
|
|
|
|
Debtors |
|
5,684 |
10,632 |
2,264 |
|
Cash and cash equivalents |
|
2,377 |
4,918 |
8,390 |
|
|
|
8,061 |
15,550 |
10,654 |
|
Current liabilities |
|
|
|
|
|
Creditors: amounts falling due within one year |
6 |
(40,786) |
(41,793) |
(41,513) |
|
Net current liabilities |
|
(32,725) |
(26,243) |
(30,859) |
|
Total assets less current liabilities |
|
930,088 |
834,749 |
962,884 |
|
Non current liabilities |
|
|
|
|
|
Deferred taxation |
|
(4,175) |
(8,152) |
(10,234) |
|
Net assets |
|
925,913 |
826,597 |
952,650 |
|
Capital and reserves |
|
|
|
|
|
Called-up share capital |
7 |
12,784 |
13,904 |
13,398 |
|
Share premium |
|
100,956 |
100,956 |
100,956 |
|
Capital redemption reserve |
|
7,360 |
6,240 |
6,746 |
|
Warrant exercise reserve |
|
8,704 |
8,704 |
8,704 |
|
Capital reserves |
|
785,287 |
688,322 |
799,898 |
|
Revenue reserve |
|
10,822 |
8,471 |
22,948 |
|
Total equity shareholders' funds |
|
925,913 |
826,597 |
952,650 |
|
Net asset value per share (pence) |
8 |
724.26 |
594.52 |
711.01 |
Registered in England and Wales as a public company limited by shares
Company registration number: 03104981
Notes to the Financial Statements
for the six months ended 31 March 2026
1. Financial statements
The information contained within the financial statements in this Half Year Report has not been audited or reviewed by the Company's independent auditor.
The figures and financial information for the year ended 30 September 2025 are extracted from the latest published financial statements of the Company and do not constitute statutory financial statements for that year. Those financial statements have been delivered to the Registrar of Companies and included the report of the auditor which was unqualified and did not contain a statement under either section 498(2) or 498(3) of the Companies Act 2006.
2. Accounting policies
Basis of accounting
The financial statements have been prepared in accordance with United Kingdom Generally Accepted Accounting Practice, in particular with Financial Reporting Standard 104 "Interim Financial Reporting" and with the Statement of Recommended Practice "Financial Statements of Investment Trust Companies and Venture Capital Trusts" issued by The Association of Investment Companies in July 2022.
All of the Company's operations are of a continuing nature.
The accounting policies applied to these financial statements are consistent with those applied in the financial statements for the year ended 30 September 2025.
3. Taxation
The Company's effective corporation tax rate is nil, as deductible expenses exceed taxable income. The taxation charge comprises irrecoverable overseas withholding tax on dividends receivable, and overseas capital gains tax.
4. Return/(loss) per share
|
|
(Unaudited) |
(Unaudited) |
|
|
|
Six months |
Six months |
(Audited) |
|
|
ended |
ended |
Year ended |
|
|
31 March |
31 March |
30 September |
|
|
2026 |
2025 |
2025 |
|
Revenue return (£'000) |
4,926 |
3,979 |
18,456 |
|
Capital return/(loss) (£'000) |
27,636 |
(37,633) |
103,321 |
|
Total return/(loss) |
32,562 |
(33,654) |
121,777 |
|
Weighted average number of shares in issue during the period |
130,964,559 |
142,496,002 |
139,772,896 |
|
Revenue return per share (pence) |
3.76 |
2.79 |
13.21 |
|
Capital return/(loss) per share (pence) |
21.10 |
(26.41) |
73.95 |
|
Total return/(loss) per share (pence) |
24.86 |
(23.62) |
87.16 |
5. Dividends paid
|
|
(Unaudited) |
(Unaudited) |
|
|
|
Six months |
Six months |
(Audited) |
|
|
ended |
ended |
Year ended |
|
|
31 March |
31 March |
30 September |
|
|
2026 |
2025 |
2025 |
|
|
£'000 |
£'000 |
£'000 |
|
2025 final dividend paid of 13.00p (2024: 12.5p) |
17,052 |
17,827 |
17,418 |
No interim dividend has been declared in respect of the six months ended 31 March 2026 (2025: nil).
6. Creditors: amounts falling due within one year
|
|
(Unaudited) |
(Unaudited) |
(Audited) |
|
|
31 March |
31 March |
30 September |
|
|
2026 |
2025 |
2025 |
|
|
£'000 |
£'000 |
£'000 |
|
Bank loan |
37,916 |
30,990 |
37,140 |
|
Repurchase of the Company's own shares |
702 |
705 |
341 |
|
Securities purchased awaiting settlement |
- |
8,059 |
2,002 |
|
Other creditors and accruals |
2,168 |
2,039 |
2,030 |
|
|
40,786 |
41,793 |
41,513 |
The bank loan comprises of US$50 million (£37.9 million) drawn down on the Company's £75 million multicurrency revolving credit facility with The Bank of Nova Scotia, London Branch. The facility was secured from 2 July 2025 and has a maturity date of 1 July 2026. The amendment and renewal of the facility are subject to covenants and restrictions customary for a facility of this nature, all of which have been complied with throughout the period.
7. Called-up share capital
Changes in the number of shares in issue during the period were as follows:
|
|
(Unaudited) |
(Unaudited) |
|
|
|
Six months |
Six months |
(Audited) |
|
|
ended |
ended |
Year ended |
|
|
31 March |
31 March |
30 September |
|
|
2026 |
2025 |
2025 |
|
|
£'000 |
£'000 |
£'000 |
|
Ordinary shares of 10p each, allotted, called-up and fully paid: |
|
|
|
|
Opening balance of 133,985,233 (year ended 30 September 2025: 146,591,216 and period ended 31 March 2025: 146,591,216) ordinary shares of 10p each |
13,398 |
14,659 |
14,659 |
|
Repurchase of 6,142,399 (year ended 30 September 2025: 12,605,983 and period ended 31 March 2025: 7,556,000) shares and cancelled |
(614) |
(756) |
(1,261) |
|
Closing balance of 127,842,834 (year ended 30 September 2025: 133,985,233 and period ended 31 March 2025: 139,035,216) shares in issue |
12,784 |
13,903 |
13,398 |
8. Net asset value per share
|
|
(Unaudited) |
(Unaudited) |
(Audited) |
|
|
31 March |
31 March |
30 September |
|
|
2026 |
2025 |
2025 |
|
Net assets attributable to shareholders (£'000) |
925,913 |
826,597 |
952,650 |
|
Shares in issue at the period end |
127,842,834 |
139,035,216 |
133,985,233 |
|
Net asset value per share (pence) |
724.26 |
594.52 |
711.01 |
9. Financial instruments measured at fair value
The Company's financial instruments within the scope of FRS 102 that are held at fair value comprise its investment portfolio.
FRS 102 requires that financial instruments held at fair value are categorised into a hierarchy consisting of the three levels below. A fair value measurement is categorised in its entirety on the basis of the lowest level input that is significant to the fair value measurement.
Level 1 - valued using unadjusted quoted prices in active markets for identical assets.
Level 2 - valued using observable inputs other than quoted prices included within Level 1.
Level 3 - valued using inputs that are unobservable.
The Company's investment portfolio was categorised as follows:
|
|
Level 1 |
Level 2 |
Level 3 |
Total |
|
31 March 2026 (Unaudited) |
£'000 |
£'000 |
£'000 |
£'000 |
|
Financial instruments held at fair value through profit or loss |
|
|
|
|
|
Equity investments |
951,343 |
11,470 |
- |
962,813 |
|
Total |
951,343 |
11,470 |
- |
962,813 |
|
|
Level 1 |
Level 2 |
Level 3 |
Total |
|
31 March 2025 (Unaudited) |
£'000 |
£'000 |
£'000 |
£'000 |
|
Financial instruments held at fair value through profit or loss |
|
|
|
|
|
Equity investments |
848,537 |
12,455 |
- |
860,992 |
|
Total |
848,537 |
12,455 |
- |
860,992 |
|
|
Level 1 |
Level 2 |
Level 3 |
Total |
|
30 September 2025 (Audited) |
£'000 |
£'000 |
£'000 |
£'000 |
|
Financial instruments held at fair value through profit or loss |
|
|
|
|
|
Equity investments |
982,037 |
11,706 |
- |
993,743 |
|
Total |
982,037 |
11,706 |
- |
993,743 |
There have been no transfers between Levels 1, 2 or 3 during the six month period ended 31 March 2026.
10. Events after the reporting period
The Directors have evaluated the period since the half year date and have not noted any significant events requiring disclosure after the end of the reporting period to the date of this Half Year Report.
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