Schroder Asian Total Return: big numbers from a busy 2025
Schroder Asian Total Return Investment Company PLC has posted a strong set of headline results for the year to 31 December 2025. The share price total return came in at 19.3%, helped by the discount narrowing sharply, while net asset value (NAV) total return was 14.2%. The trust entered the FTSE 250 in June and picked up Investment Week’s Investment Company of the Year award in the Asia Pacific category in November.
Relative to the Reference Index (20.6%), 2025 was a year of underperformance. Since the start of 2026, however, the managers say performance has moved back ahead of the benchmark. Over longer periods to 31 December 2025, the strategy remains in front over three, five and ten years, compounding at 12.5% per annum over the last decade versus 9.5% for the index.
| Key metric (31 Dec 2025) | Outcome |
|---|---|
| Share price total return | 19.3% |
| NAV total return | 14.2% |
| Reference Index | 20.6% |
| Share price | 560.00p |
| Discount to NAV | 1.1% (average 3.5% in 2025; 5.1% in 2024) |
| Net assets | £529.45m |
| Revenue return per share | 9.81p |
| Proposed dividend | 11.5p (unchanged) |
| Gearing | 5.5% (range 2%-8% in year) |
| Ongoing charges | 0.8% |
Why the trust lagged the index in 2025
Quick jargon buster: NAV total return is the portfolio’s percentage gain after fees and dividends reinvested; the share price total return factors in the market price, which can trade at a premium or discount to the NAV. The discount narrowed to 1.1% by year end, which boosted the share price outcome versus NAV.
The managers point to three main drags on relative performance:
- Limited participation in Korea’s “Value-Up” programme, where a broad rerating rewarded companies with improving governance and dividends.
- Stock selection in Hong Kong/China, including a zero weight in Alibaba for much of the year as its cloud optimism re-rated the shares. The trust later added a half-index-weight position, but the earlier underweight still hurt.
- AI dispersion: trimming Samsung Electronics too early, missing part of the late-year memory upcycle, while SK Hynix exposure helped but wasn’t enough. AI-adjacent names such as SK Square and HD Hyundai Electric rallied without the trust on board.
On the flipside, overweights in Tencent and NetEase and underweights in JD.com and Xiaomi contributed positively, and Taiwan exposure – notably Chroma ATE – provided some offset. The team also avoided Korean defence stocks on governance concerns, preferring to play defence spending via India’s Bharat Electronics.
Positioning now: more cautious, more selective
The managers are dialling back risk for 2026. Valuations across Asia are elevated versus history, and the top-down models they use are close to “sell” territory. Bottom-up, they still see a balanced mix of opportunities, with 57.7% of stocks under coverage trading below Schroders’ fair values – neutral rather than outright cheap.
Gearing – borrowing to amplify returns – has been reduced substantially and net equity exposure is around 95%. The trust continues to use contracts for difference (CFDs) as a cost-effective, flexible way to borrow, alongside a small £23.5 million revolving credit facility. Hedging remains part of the toolkit; they currently use put options on India’s NIFTY index to manage elevated valuation risk there.
How the portfolio is clustered across Asia
- China/Hong Kong – still underweight, but exposure has risen as capital return policies improve in places. Stock picking remains key given structural headwinds.
- Korea/Taiwan – effectively the semiconductor/technology block. After trimming AI-exposed names as valuations ran, the trust is now slightly underweight.
- Australia/Singapore – “yield/income cluster”. Increased allocations to more defensive, dividend-paying names; now quite overweight.
- India/ASEAN – positive on India’s macro, but wary of expensive valuations and punchy earnings expectations; underweight for now and would add on a correction. More cautious on ASEAN given politics and geopolitics.
Discount, buybacks and FTSE 250 status
The average discount during 2025 was 3.5%, tightening to 1.1% at year-end. With the discount within the Board’s targeted range (no wider than 5% in normal conditions), the company did not buy back shares in 2025. If the shares move to a premium, the Board intends to issue shares, as it has done before. Tight discounts and potential issuance are usually a sign of healthy demand.
In June 2025, the trust entered the FTSE 250, a marker of growing scale that can improve visibility and liquidity. The icing on the cake was winning Investment Week’s Investment Company of the Year award (Asia Pacific category) in November.
Dividend held, income nudged higher
The Board recommends a final dividend of 11.5p per share, unchanged from last year. Revenue return per share edged up to 9.81p from 9.61p. Dates to note: ex-dividend 9 April 2026, record date 10 April 2026, payment date 11 May 2026, subject to AGM approval. As ever, the managers emphasise total return rather than income targeting.
Costs and risk management: steady and sensible
Ongoing charges fell to 0.8% from 0.9%. Gearing ran between 2% and 8% over the year and contributed positively. The trust caps net gearing at 30% of NAV. The risk report flags an increase in macro risk, citing Middle East tensions, volatile US trade policy and rising AI capex budgets. No significant control failings were identified. Service providers transitioned to J.P. Morgan as depositary, custodian and administrator, with external audit checks on the migration.
One corporate development to watch: Schroders plc announced an agreed cash acquisition by Nuveen on 12 February 2026, with completion not expected until Q4 2026. There is no change for shareholders today, but it is worth keeping on your radar.
My take: strengths, watch‑outs, and what matters next
What looks good
- Strong absolute performance with a 19.3% share price total return and discount near par – that combination is powerful for shareholders.
- Long-term record intact: ahead of the benchmark over three, five and ten years, and 12.5% per annum over a decade versus 9.5% for the index.
- Cost discipline and smart use of tools: ongoing charges at 0.8%, flexible CFD borrowing, and targeted hedging rather than big macro bets.
- Portfolio tilt toward higher-quality income markets (Australia/Singapore) should help if 2026 proves choppier.
What to keep an eye on
- AI cycle risk: 2025’s dispersion between perceived winners and losers was unforgiving. If capex enthusiasm cools, sentiment could swing quickly.
- China selectivity: better capital return policies help, but structural headwinds persist. Stock picking will need to do the heavy lifting.
- India valuation risk: the managers are hedged here via NIFTY puts; that caution seems sensible given stretched pricing.
- Return expectations: management guidance is for more “moderate” returns in 2026, with reduced gearing and a more defensive stance.
Dates and housekeeping for investors
- AGM and manager presentation: Thursday, 23 April 2026 at 12.00 pm, 1 London Wall Place, London EC2Y 5AU. A webinar will run alongside the presentation (calendar link provided in the RNS).
- Dividend timetable: ex-dividend 9 April 2026; record 10 April 2026; payment 11 May 2026.
- Authorities: the Board will seek renewal of issuance and buyback powers at the AGM.
Bottom line
This is a seasoned Asian equity trust with a clear process: stock picking first, risk controls alongside, and a willingness to trim hype-driven positions. 2025 served up absolute gains but relative frustration – mostly about AI exuberance and Korea’s governance-led surge. The managers have pivoted to a more defensive posture, reduced gearing and kept a steady dividend. If you want Asia exposure with an active overlay to smooth the bumps, this remains a credible long-term option – just set expectations for a steadier, more selective 2026.
