Schroder Oriental Income
Launched in 2005, the Schroder Oriental Income Fund aims to provide income and capital growth by investing in Asia Pacific companies (including Australia and New Zealand) that offer attractive yields and growing dividend payments.
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Fund Manager
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Richard Sennitt joined Schroders in 1993 and has been managing the Schroder Asian Income Fund since its launch in 2006, demonstrating a strong track record in Asian markets. In addition to managing income-focused funds, Richard has collaborated with Matthew on growth-oriented funds for 13 years.
Richard Sennitt joined Schroders in 1993 and has been managing the Schroder Asian Income Fund since its launch in 2006, demonstrating a strong track record in Asian markets. In addition to managing income-focused funds, Richard has collaborated with Matthew on growth-oriented funds for 13 years.
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Fund Performance
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Quote from the Fund Manager
Having run Asian equities for over three decades, it is lucky I am a big fan of jigsaws – the tougher the better!
Richard Sennitt
Lead Manager
Investment process
Richard has a structured but pragmatic process. He analyses how economic policies will affect his investment process and his philosophy is consistent across the various funds and Trusts he runs. He believes long-term returns are driven by valuation considerations, but he is willing to exploit other opportunities if the investment case is strong enough. Ideas are sourced from Schroders’ huge regional analyst team, brokers and Richard himself. He then invests in the best 60 to 80 non-consensus ideas. Richard will also consider other, more qualitative factors, such as barriers to entry and strength of management.
Risk
In general, income-oriented investments tend to be lower risk than those that are growth-focused and the same is true here. Richard’s disciplined and detailed stock research and selection process ensures that the portfolio is well diversified, which also helps to reduce the risk in these more volatile markets. Movement in currencies is an additional risk that investors should take into account.
ESG
ESG - Integrated
ESG factors are integrated throughout the investment process for the whole of the Schroders company, this trust included. ESG analysis helps determine the sustainability of a company’s earnings and potential risks.
Schroder’s ESG work begins with their ‘SustainEx’ tool developed in-house by a 25 strong central ESG team. Sustainex has won a number of awards and continues to be upgraded all the time. It quantifies the positive and negative impacts companies have on society. Most approaches measure impact relative to a benchmark where as SustainEx calculates a quantifiable overall impact. There are over 45 positive and negative externalities which have been drawn from over 400 academic studies and are applied to 9,000 global companies. The tool helps fund managers to identify previously unaccounted for ESG risks and helps them to build these risks into their valuation framework.
Each individual strategy has their own ESG specialist on the team. In addition to SustainEx, analysts also use the Context tool which allows analysts to add their own input. It is also used in the valuation process, with higher discount rates applied to weak ESG companies. Some companies ESG will be so weak that they are considered uninvestable. ESG also helps shape portfolio construction. Those stocks with a higher ESG risk may have a reduced weight in the portfolio, or if the risk is high enough, no position at all.
Gearing
The manager sets the gearing of the Company in conjunction with the Board, who monitor the level closely. The maximum allowable is 25% of the net assets and Richard has a revolving multi-currency credit line of £100m at his disposal. Gearing has not exceeded 6% in the past decade.
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