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(Alliance News) - Schroder Asian Total Return Investment Co PLC on Thursday said net asset value fell in 2022, while its total return underperformed against its benchmark index.
Schroder Asian invests in equities and equity-related securities of companies trading in the Asia Pacific region, excluding Japan.
NAV per share at December 31 was 434.60 pence each, down 14% from 507.24p a year earlier.
Across 2022, NAV total return was negative 12.7%, meaning Schroder Asian underperformed against its benchmark index, which fell by 7.1%.
Shares in Schroder Asian were up 0.1% to 418.00p each in London on Thursday afternoon.
Pretax net loss was GBP71.0 million, swinging from net profit of GBP38.1 million a year earlier. This was because it swung to a 2022 loss on investments held at fair value of GBP86.4 million from a gain of GBP35.9 million in 2021.
Schroder Asian declared a final dividend of 11.00p, up 30% from 8.50p a year earlier. Schroder Asian pays no interim dividend, so the final dividend is the payment for all of 2022.
"2022 was a difficult year for Asian markets and a disappointing one for the company. Russia's unexpected invasion of Ukraine significantly changed global growth and inflation expectations causing a sell off in equity markets across the board with technology and semiconductor sectors faring particularly badly which adversely impacted the company's performance," said Chair Sarah MacAulay.
"China's zero-Covid policy, maintained until the last month of the year, further depressed economic and corporate growth expectations within Asia and markets in the region were particularly hard hit. Our portfolio managers reduced positions in technology stocks most exposed to cyclical slowdown and heightened trade tensions, whilst utilising derivatives to reduce overall market exposure."
Looking ahead, Schroder Asian noted that markets have been unsettled by recent US economic data, which it argued may result in greater-than-expected interest rate hikes by the US Federal Reserve.
MacAulay argued initial optimism at the start of the year over the direction of interest rates and inflation has "swiftly abated" as a result.
"Geopolitical tensions continue to hang over the markets. There is mounting concern over China's lack of condemnation for the Russian invasion of Ukraine. In addition, US/China relations remain delicate over Taiwan, US sanctions and US restrictions on technology transfer to Chinese companies," MacAulay continued.
"However, the impact of reopening in China, following the abandonment of their zero-Covid policy, will have positive implications across the region for both economic growth and earnings expectations. Asian equity valuations are moderate when compared both to their historical range and against other regions, with many attractive opportunities to be found."
By Greg Rosenvinge, Alliance News reporter
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