Schroder Asian Alpha Plus: September 2026 fund update

• The fund invests in high-quality companies operating across Asia

• Abbas Barkhordar recently became the fund’s lead manager

• Schroders has a large dedicated team of analysts across the region

• This fund features on our Wealth Shortlist of funds chosen by our analysts for their long-term performance potential

How it fits in a portfolio

The Schroder Asian Alpha Plus fund aims to grow capital over the long-term by primarily investing in large Asian companies from countries such as China, South Korea, and India, but excluding Japan.

We think the fund could be a good option within the Asian portion of a globally diversified investment portfolio. Investments in emerging markets offer long-term growth potential but add risk. The associated volatility should be considered when constructing a long-term portfolio.

Manager

Abbas Barkhordar is the fund’s lead manager. He joined Schroders as a graduate in 2007 and spent over a decade analysing companies in emerging and frontier markets. After moving to Schroders’ Asia team in 2020, he was appointed deputy manager of the fund in 2021 and promoted to co-manager in 2023, before becoming lead manager in June 2026.

Previous manager Richard Sennitt stepped down from the fund at this time but continues to work closely with Barkhordar. You can read more about this change here.

There are thousands of companies in this part of the market, so Barkhordar has the support of a large team of analysts based across Asia. They help sift through the market and uncover what they believe to be the most promising opportunities.

Barkhordar is also responsible for Schroder Asia Pacific Fund, which is an investment trust but invests in a similar way. Given the overlap in process and investable universe, we think he can comfortably handle this workload.

Process

Barkhordar believes that Asian markets are a stock pickers paradise. Since they tend to be less researched than developed markets there’s plenty of opportunity to uncover hidden gems. They tend to be more volatile though, so the manager believes the best way to navigate these risks is by investing in high-quality businesses but without paying too much for them.

To narrow down the large investment universe, Barkhordar works closely with Schroders' Asian equities team to help generate ideas for the fund. They look for companies they think can sustain growth over the long run. They should have good cash flows, strong franchises, a quality management team, superior corporate governance standards, and a strong business model that's able to defend against competition. Next, the team aims to forecast the earnings of each business, which could ultimately influence the direction of the share price.

While the focus is on individual company analysis, Barkhordar also considers economic factors to provide broader context to the team’s research. This may involve looking at inflationary trends and monetary policy, amongst other factors.

This results in a portfolio of between 50-60 companies. Currently, 42% of the fund invests in technology companies, with significant investments in TSMC – the largest global semiconductor producer – and Samsung Electronics. Financials make up the next largest portion of the fund.

Geographically, the fund invests most in Taiwan and Korea. China accounts for 20% of the fund. This is less than the broader Asian market, but the fund has more invested in Hong Kong.

Recent additions to the fund include Chinese construction equipment manufacturer Sany Heavy Industry. Korean companies Hanwha Aerospace and construction business Samsung C&T were also added to the fund. Barkhordar invested in Samsung Electro-Mechanics but sold the shares shortly after following strong performance.

The fund’s investments in India’s ICICI Bank and Vietnamese technology company FPT Corp were also sold.

The fund may use derivatives which, if used, can add risk.

Culture

Schroders is a well-established asset manager with offices all over the world. It believes the importance of Asian and emerging markets in the global economy has increased significantly over the years and expects this to continue. We think Schroders is dedicated to investing in this part of the world and supporting the teams that invest there.

We believe incentivisation for Schroders’ fund managers and analysts is focused on longer-term performance potential and is therefore aligned with their investors. The Asian equities team is based across the UK and Asia, and this remains an important resource for the group’s range of Asian funds.

In February 2026, Schroders announced that it would be acquired by US asset management company Nuveen. No changes to the investment team are expected at this stage, but we’ll monitor any developments and potential impact on the fund.

ESG Integration

Schroders has invested significantly in ESG (environmental, social, and governance) resources and tools in recent years. Investment teams have access to a variety of data sources brought together into a proprietary platform called SustainEx, which allows them to quantify a company’s positive and negative contributions to society.

All Schroders funds were required to pass the firm’s inhouse ESG accreditation process by the end of 2020. All new funds must also be ESG accredited, and investment teams must reapply for accreditation on an ongoing basis.

This process is managed by the Sustainable Investment team. They sit on the investment desk and are objective in their approach. There is a set list of criteria that funds must meet to become accredited, and the process is substantial – no fund has ever gained accreditation on the first attempt. Fund managers are also expected to demonstrate improved levels of ESG integration over time.

The Schroders Sustainable Investment team acts as a focal point for ESG, proxy voting, and engagement. When it comes to proxy voting, Schroders has structured policies in place and is transparent on the reasons proposals have been voted against. On the ESG engagement side, the firm’s activities and outcomes are monitored, tracked and reported in its quarterly Sustainable Investment reports. There are also a range of ESG-related insight and thought leadership articles available on the firm’s website.

While ESG factors are considered in company analysis, this isn’t a sustainable fund.

Cost

The fund has an annual ongoing charge of 0.92%, but we’ve secured HL clients an ongoing saving of 0.04%. This means you’ll pay a net ongoing charge of 0.88%. The fund discount is achieved through a loyalty bonus, which could be subject to tax if held outside of an ISA or SIPP.

Our platform charge of up to 0.35% per year also applies, except in the HL Junior ISA where no platform fee applies. Both a buy and sell instruction will be subject to HL dealing charges.

Find out more about our charges.

Performance

Since Barkhordar was appointed manager of this fund in March 2021 it’s returned 52.6%*. This is behind the MSCI AC Asia ex Japan index, which gained 53.5% but ahead of the IA Asia Pacific ex Japan sector, where the average fund returned 48.2%. Past performance isn’t a guide to the future. Investors should be aware that much of this performance is attributable to both Barkhordar and Sennitt.Going forward final decisions will rest with Barkhordar.

Over the most recent year to the end of August 2026, the fund performed well in strong market conditions. Returns of 43.8% beat both the fund’s benchmark and the wider peer group, which returned 40.4% and 36.0% respectively.

Technology companies were the largest contributors to performance during this period. Many companies in Asia have benefited from their positions in artificial intelligence (AI) supply chains. For the fund, this included investments in ASE Technology, MediaTek, and Delta Electronics in Taiwan.

Investments detracting from performance included Chinese businesses Tencent and Tencent Music, and India’s HDFC Bank. MakeMyTrip, a leading online travel agency in India, also detracted. The company saw weaker demand for its services while some investors believe the industry will be impacted by further AI developments.

We think this fund has good long-term prospects, though its growth style of investment means it can be more volatile than other funds in the IA Asia Pacific ex Japan sector. That said, there are no guarantees how the fund will perform in future.