Results analysis from Kepler Trust Intelligence

Schroder Oriental Income Fund Ltd

22 May 2026

 

Schroder Oriental Income (SOI)

22/05/2026

Results analysis from Kepler Trust Intelligence

Schroder Oriental Income (SOI) has released its half-year report ending 28/02/2026, with a NAV total return of 35.3%, which compares to a 30.7% return for the trust's benchmark and 30.1% for the sector average. Key factors were Korea and technology, both driven by increased demand, with strong stock selection from technology adding alpha. Similarly, Australian stock picks also contributed positively. An underweight to China was also a positive in the period.

Whilst gearing was modest in the period, it contributed positively in the strongly rising market.

Manager Richard Sennitt added selectively to China in the period, although the country remains underweight despite being offset by an overweight to Hong Kong. Singapore is a notable overweight position due to opportunities in the financial sector.

SOI's share price rose 38.1%, leading to discount narrowing. Despite this, the board continued with share buybacks during the period and afterwards, totalling c. 2% of opening count.

The board tweaked the dividend strategy and paid two interim dividends of 2p and 2.5p per share with the third likely to be similar to the second. Should this be the case, and the final dividend be maintained at last year's level, the trust would offer a yield of c. 3.1%. Should the trust grow its dividend across the full financial year, it will mark 20 years of consecutive growth, earning the AIC's Dividend Hero status, becoming the first Asia-focussed trust to achieve the accolade.

As a result of the strong returns, the trust earned a performance fee totalling £5.2m, equivalent to 0.55% of NAV. We note the performance fee is being removed at the end of this financial year. 

Discussing the more challenging period post-results, Chairman Nick Winsor, noted the "focus on quality companies with attractive dividend prospects and potential for capital growth over the long term remains the best way to navigate current market volatility"

Kepler View

These results have delivered some excellent returns for Schroder Oriental Income (SOI), both in absolute and relative terms. The ability of manager Richard Sennitt to deliver outperformance through stock selection is a standout in our view. Longer-term numbers show this is not an exception, with five-year returns to publication of 91.6% versus 50.6% for the benchmark.

On a nearer term view, the trust's positioning could continue to appeal, due to Richard's growing income approach versus peers with enhanced dividend strategies, meaning more of a value and core tilt. Not only has this been supportive to relative performance through stock selection, but also to income generation too, aiding the growing dividend over time.

Richard's willingness to make sizeable calls on certain sectors or countries also differentiates the trust. The portfolio has a sizeable underweight to China and a large overweight to Singapore. For investors that share Richard's scepticism over China but still see the growth potential in the Asian region, this positioning may appeal. Interestingly, we note small off-benchmark positions in both Vietnam and India. The latter has been popular for its growth characteristics but has limited income opportunities. We believe that by finding them, Richard has shown flexibility and established a foundation for potential future alpha.

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