The Schroder Asian Total Return Investment Company pairs selective, high-conviction stock choices with strict risk controls. Its aim is to produce strong returns over the long term, even as Asian markets move through volatile cycles.
Asia is still home to some of the world's leading technology companies, semiconductor makers, and digital consumer platforms.
The region's long-term growth prospects attract many investors, but investing there can be difficult. Sentiment can turn quickly, geopolitical tensions remain uncertain, and heavy reliance on one story - AI, for example - may leave investors cautious.
That, Robin Parbrook and Lee King Fuei - the Schroder Asian Total Return investment trust's Portfolio Managers - believe, is where they have an advantage.
Best stock ideas
The Schroder Asian Total Returns portfolio takes a high-conviction approach to picking stocks. Its managers seek well-run companies with strong business models and durable competitive advantages - what Warren Buffett calls a moat - while looking for shares whose valuations still fall short of their long-term growth potential.
The trust does not follow a benchmark. Its stock picks come entirely from fundamental research, not index weightings. Schroders' six Asian offices have 47 regional analysts focused on local markets, giving the team the insight to understand the business models behind these standout opportunities.
Fortunately, Asia's equity markets offer enough breadth and variety for investors to pick their spots carefully. The managers divide the region into four groups, each shaped by different forces: Taiwan and South Korea follow the technology cycle; China and Hong Kong respond more to country-specific factors; Australia and Singapore are driven by dividend yield and total returns; while India and ASEAN depend mainly on domestic growth. As conditions change, the trusts team shifts between these groups to add value. Together, they provide access to distinct themes and to long-term growth at home and abroad.
During the first half, Korea and Taiwan made up the portfolio's largest regional concentration. Recently, though, the team has cut that exposure and shifted more of the portfolio into Australia and Singapore, which are viewed as more defensive markets.
Potential insurance
The trust is not just about picking stocks. Its managers also aim to protect capital when markets fall, using quantitative models to identify risks and signs of stress.
When the models flag danger, managers may protect their positions by moving from riskier growth companies into steadier defensive businesses, while adjusting cash or short-term borrowing as market conditions change.
The team can also use options or futures to insure the portfolio against financial risk.
Suppose managers remain confident in a particular company for the long haul but think the wider market is overpriced. They can hedge with derivatives, limiting the damage from a broad market decline without selling the shares they still want to hold.
Strong track record
Schroder Asian Total Return trust combines stock picking from the ground up with a top-down check on risk. Over the 10 years to the end of September 2026, that approach produced annualised net asset value total returns of 12.9%, ahead of the MSCI AC Asia Pacific ex Japan reference index, which returned 9.3% a year.
The Schroder Asian Total Return trust actively manages its discount, buying back shares when needed to keep the market price close to net asset value. As a result, it has one of the smallest discounts among its peers.
Find out more at www.schroders.com/ATR
Past results do not predict what will happen next. Investment values and income can rise or fall, and investors might receive less than they initially put in. Changes in exchange rates can also increase or reduce the value of investments held overseas.
Before investing, consider speaking with an Independent Adviser. Find one through www.unbiased.co.uk or www.vouchedfor.co.uk. If you are considering an Investment Trust, read its prospectus and the latest Key Information Document and Key Features Document, available at www.schroders.co.uk/investor or on request.
Issued by Schroder Unit Trusts Limited, 1 London Wall Place, London EC2Y 5AU. Registered under No 4191730 and authorised and regulated by the Financial Conduct Authority.
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