Results analysis from Kepler Trust Intelligence
Summary by AI BETAClose X
Schroder Oriental Income
13/11/2026
Results analysis from Kepler Trust Intelligence
Schroder Oriental Income (SOI) has released its annual report to 31/08/2026 and completed 20 years of dividend growth, making it the first Asian trust to earn the AIC’s Dividend Hero accolade.
The trust also delivered a NAV total return of 51.7%, notably ahead of its benchmark. Share price returns were even stronger, with a total return of 56.9% leading to the discount narrowing. Performance was largely driven by stock selection, including from technology firms in Taiwan and Korea. However, the decisions to not hold two key Chinese firms were some of the biggest contributors, meaning both stock selection and the underweight allocation to China were positive contributing factors.
Stock selection in the region’s more developed markets also contributed positively, aided by the value factor. These positives offset the headwind from an underweight allocation in Korea. Due to strong relative returns, the performance fee cap was met. This has now been retired.
Manager Richard Sennitt has been taking profits from his top technology holdings, turning it from an overweight position to the largest underweight. Financials remains overweight despite selective profit-taking as well as consumer staples and real estate. On a country level, the combined underweight to Hong Kong and China has narrowed whilst profit-taking has led to both Korea and Taiwan becoming sizeable underweights.
The underlying revenue increased in the year, although a small amount of reserves were used to support the dividend growth. Reserves remained robust at year end.
Chairman Nick Winsor was forward-looking in his comments, noting, “The long-term outlook for the Asia Pacific region and the opportunities it presents for income-focused investors remains compelling,” whilst also commenting on the manager’s “disciplined investment approach” which “provides a strong foundation for the Company’s future success".
Kepler View
It’s rare that a trust delivers returns of over 50% and outperforms its benchmark, and yet the focus is elsewhere. However, the landmark distinction of becoming the first Asia-focused trust with Dividend Hero status, having delivered 20 consecutive years of dividend growth has earned the plaudits.
We believe the manager’s dividend growth approach will be familiar to traditional equity income investors, and whilst the yields are slightly lower, the improving dividend culture and stronger economic development mean future growth potential is far superior. In addition, SOI’s approach is now unique amongst peers making the trust a standout option.
The benefits have been demonstrated in these results by value being supportive to performance. However, stock selection has again been the primary driver of performance, generating alpha on stocks held and from those not owned. Richard’s long-term caution over China has again been supportive, which we believe is a good demonstration of his investment discipline.
Richard continues to be active with positioning. Moving from an overweight in technology to the largest underweight by year end is bold, in our view, demonstrating conviction and pragmatism. This view is reinforced by the significant narrowing of the combined China and Hong Kong underweight in the year, despite it being a significant driver of relative performance. As such, we believe SOI continues to be one of the most compelling strategies for accessing the ongoing potential from Asian equities.
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