Schroder Asia Pacific: February 2026 investment trust update

• The trust invests in a portfolio of high-quality companies operating throughout Asia

• Richard Sennitt is a veteran investor with three decades’ worth of experience

• Schroders have invested in a large team of analysts across the region for the managers to utilise

How it fits in a portfolio

The Schroder Asia Pacific investment trust aims to provide long-term growth by primarily investing in large Asian companies from countries such as China, India, and Taiwan.

It could be a good option within the Asian portion of a globally diversified investment portfolio. Investments in emerging markets add risk.

Investors in closed-ended funds should be aware trusts can trade at a discount or premium to their net asset value (NAV).

Manager

Richard Sennitt has been the trust’s lead manager since March 2021, following the retirement of veteran investor and long-term colleague, Matthew Dobbs. Sennitt joined Schroders in 1993 and has a wealth of experience investing in Asian markets having managed the Schroder Asian Income Fund since 2001, as well as a few other Asian income funds that are run similarly.

Abbas Barkhordar also became co-manager in 2021 when Dobbs retired. He joined Schroders in 2007, initially as an analyst on the Emerging Markets Equities team.

Both managers are also responsible for the open-ended Schroder Asian Alpha Plus fund, which is on our Wealth Shortlist and invests in a near identical way. Given the overlap in the investment process and the companies the managers consider, we think they can comfortably handle their workload.

There are thousands of companies in this part of the market, so the managers have 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.

Process

Sennitt and Barkhordar believe that Asian markets are a stock picker’s paradise. Since they tend to be less researched than developed markets there’s plenty of opportunity to discover hidden gems. These markets tend to be volatile though and that’s why the managers believe the best way to navigate these risks is by investing in high-quality businesses, but without paying too much for them.

To whittle down the vast universe of Asian companies, the managers work closely with Schroders' Asian equities team to help generate ideas for the trust. They look for companies they think can sustain returns over the long run. Companies should have good cash flows, strong franchises, a quality management team, and a strong business model that's able to defend against competition. Next, they aim to forecast the earnings of each business, which could ultimately influence the direction of the share price.

While the managers mainly focus on individual company analysis, they also consider economic factors to provide broader context to their research. This may involve looking at inflationary trends and monetary policy, amongst other factors.

This results in a portfolio of between 55-70 companies, with the trust typically towards the bottom of the range. Currently, 35% of the trust invests in technology companies, which is more than the wider Asian market (the benchmark). This includes large investments in companies such as Taiwanese business TSMC and Korea’s Samsung Electronics. The trust also invests 21.2% in financial companies, including banks in India, Hong Kong, and Singapore. Geographically, the trust invests most in Taiwan and China, although the 24.5% invested in China is less than the benchmark.

The managers adopt a long-term perspective when making investment decisions, which often results in minimal change to the trust. In the past year, they added an investment in Indian online travel agency MakeMyTrip and Chinese recruitment platform Kanzhun. They also bought shares in Malaysian company Grab, a food delivery app operating throughout Southeast Asia.

The managers sold investments in the Taiwanese semiconductor company United Microelectronics and Indian IT services provider Tata Consultancy.

The fund managers mainly invest in large, well-established companies, but also have the ability to invest in higher-risk smaller companies. They can also use derivatives and gearing in managing the trust, both of which increase risk. The current level of gearing is 2.6%.

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 it will be acquired by US asset management company Nuveen. No changes to the trust or its investment team are expected at this stage, but we’ll monitor any developments and potential impact on the trust.

ESG Integration

Schroders has invested significantly in ESG (environmental, social, and governance) resources and tools in recent years. Each investment desk has access to a variety of data sources that have been brought together into a proprietary platform called SustainEx, which allows investment teams to quantify a company’s positive and negative contributions to society. The Asia team has an additional tool, Context, which analysts use to incorporate ESG when analysing a company.

All Schroders funds were required to pass the firm’s in-house 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.

The ESG accreditation 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 and annual Sustainability reports. There are also a range of ESG-related insight and thought leadership articles available on the firm’s website.

While Schroders have made good progress with respect to ESG, this trust isn’t managed to a responsible mandate.

Cost

The ongoing annual charge over the trust’s financial year to 30 September 2025 was 0.84%. This was a slight reduction from 0.88% in the previous year. Investors should refer to the latest annual reports and accounts, and Key Information Document for details of the risks and charging structure.

If held in a SIPP or ISA, the HL platform charge of 0.45% (capped at £200 for a SIPP and £45 for an ISA) per annum also applies except in the HL Junior ISA, where no platform fees apply. The platform charge doesn’t apply if the trust is held in a Fund and Share Account.

Investment trusts trade like shares so both a buy and sell instruction will be subject to the HL share dealing charges within any HL account, except online in the HL Junior ISA.

From March 2026, the amount clients pay to invest with us will change. Find out more about these changes.

Performance

Since Sennitt and Barkhordar took over management of the trust in 2021, it’s returned 22.92%* in share price terms compared to the 29.83% growth of the MSCI AC Asia ex Japan index. Stock selection (the ability to invest in companies that go on to perform regardless of which country or sector they’re in) was weaker, particularly in India and China. Remember, past performance isn’t a guide to the future.

Over the 12 months to the end of January 2026, the trust’s share price rose 30.73%, ahead of the benchmark’s 29.35% growth. Over the same time, the trust’s NAV grew by 26.48%.

Investments in technology companies Delta Electronics and Samsung contributed to performance over the past 12 months. Communication services businesses NetEase and Singapore Telecommunications also benefitted the trust.

The trust having less invested in Korea than the benchmark detracted as the market performed strongly. This included a decision not to invest in technology company SK Hynix. The managers believe the company’s shares to be expensive relative to competitors. Other detractors included HDFC Bank and Apollo Hospitals in India.

At the time of writing the trust trades at a discount of 10.31% and has a dividend yield of 1.81%. Be aware that yields are variable and aren't a reliable indicator of future income.