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Invesco Asia Dragon Trust PLC on Thursday said it underperformed against its benchmark index during its most recent financial year as it was hurt by market instability, but it remains optimistic for the year ahead as it becomes the largest trust in its sector. The Oxfordshire, England-based and Asia-focused investor is the product of the merger of Invesco Asia Trust PLC and Asia Dragon Trust PLC. The combination was completed in February this year, and the enlarged company took Asia Dragon Trust’s place in the FTSE 250 index. The company noted its new net asset value of £730 million following the merger now made it the largest trust in the AIC Asia excluding-Japan Income sector. NAV total return for the year that ended April 30 was 2.8%, improved from 2.7% the year before but underperforming against a 3.9% total return on its benchmark index, the MSCI AC Asia ex Japan Index. NAV per share at April 30 was 356.31 pence, down 1.4% from 361.51p the year before. Income in the year grew 72% to £12.7 million from £7.4 million. The firm swung to a negative pretax net return of £21.9 million, against a positive £6.9 million return the prior year. ‘The performance narrative for the period was broadly positive, with Asian equity markets enjoying positive momentum for most of the period, supported by the start of a global rate easing cycle, attractive starting valuations and robust corporate earnings,’ commented Portfolio Managers Fiona Yang and Ian Hargreaves. ‘However, it has not been plain sailing, with Asian markets weakening initially in response to the US election result, before a China-led rebound to start the year on the back of signs of improvement in fundamentals and some excitement related to progress in AI and robotics. Then came ’Liberation Day’, larger than expected ’reciprocal’ tariffs and a period of heightened volatility for global financial markets, and although there has been a de-escalation on tariffs, investors continue to face significant uncertainty in the direction of US policy under the current administration.’ Shares in Invesco Asia Dragon Trust were marginally higher at 359.05p in London midday Thursday. It declared a total dividend of 15.60p per share, up 11% from 14.10p the year prior. The portfolio managers continued: ‘Against this backdrop, the portfolio delivered a positive return, albeit behind that of the benchmark index. Strong stock selection across different countries and sectors has helped compensate for the impact of being overweight the two worst performing markets in Asia, with Korea and Indonesia both impacted by domestic political headwinds. ‘Meanwhile, a change in market leadership meant the portfolio’s tilts towards Singapore, Hong Kong and China have contributed positively to relative performance, as have underweight positions in India and Taiwan. Our approach continues to be guided by valuations, with a focus on stock picking, balance sheet strength, and maintaining a well-diversified portfolio, rather than trying to lean too heavily on specific macro outcomes.’ Copyright 2025 Alliance News Ltd. All Rights Reserved.
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