(Alliance News) - abrdn Asian Income Fund Ltd on Thursday said net asset value per share fell and underperformed its benchmark over six months, although it managed to narrow losses on investments annually.
The closed-end fund concentrated on Asian equities said NAV per share fell 5.8% to 229.17 pence from 243.44p on December 31, and down 4.5% from 240.04p a year earlier.
This marked a NAV total return of negative 3.7% over the previous six months, underperforming its benchmark, the MSCI AC Asia Pacific ex Japan Index, which had a total return of negative 2.4%.
However, over the previous 12 months, abrdn Asian Income outperformed its benchmark, with a total return of negative 3.6% compared to negative 6.8% respectively.
Shares in abrdn Asian Income fell 0.6% to 194.49p each in early morning trading in London on Thursday.
While NAV per share may have fell on a six-month and annual basis, abrdn Asian Income narrowed its losses on investments held at fair value to GBP24.6 million from GBP36.2 million a year earlier.
Pretax loss also narrowed to GBP12.8 million from GBP29.6 million.
abrdn Asian Income said it expects its annual 2023 dividend to exceed 10.60p for a 5.4% yield. In 2022, it paid 10.00p per share to shareholders.
Chair Ian Cadby stressed that the latest results demonstrated a "short-term" underperformance, he pointed to the company outperforming its benchmark over the previous one, three and five years.
"The first half of 2023 was a challenging period for investors in Asian stock markets, as the macroeconomic environment and monetary policy moves continued to influence investor sentiment significantly more than individual company performance," said Cadby.
"While recession risks persist in Europe and the US, owing to continued policy rate tightening, it bears noting that inflation remains lower in Asia."
Looking ahead, Cadby said Asian markets are likely to remain volatile until there is further clarity on China and the strength of its economy.
"However, despite the recent difficulties, the fundamental long-term rationale for investing in Asia remains compelling," said Cadby.
"The investment manager's focus remains on quality companies with sustainable business models, strong cash flows and access to structural growth drivers across Asia, as these support growth in both capital and shareholder returns."
By Greg Rosenvinge, Alliance News reporter
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Abrdn Asn Inc (AAIF)