abrdn Asian Income Fund Ltd on Thursday said it underperformed its benchmark in the first half but still had positive returns amid improving economic conditions.
The Asia-focused fund said net asset value per share rose 3.7% to 247.36 pence on June 30 from 238.59p at December 31.
NAV total return in the six months to June 30 stood at 6.8%, underperforming the benchmark MSCI AC Asia Pacific ex Japan Index which returned 9.6% over the same period.
abrdn Asian Income repurchased 7.9 million shares, representing 4.7% of issued shares at the start of the six months, at an average discount to NAV of about 13%.
Chair Ian Cadby said: ‘Pivotal themes that drove sentiment included the growing expectation that the US Federal Reserve will start to cut interest rates in the second half of 2024. In China, fresh targeted measures to support and stimulate the economy alleviated growth pressures. This provided a boost to confidence and led to a recovery in mainland equity markets.’
During the period, the investment manager exited companies where valuations were expensive relative to expected future earnings growth potential such as Momo.com Inc.
New positions included the property firm Mirvac Group as well as the Australian toll road developer and operator Transurban Group.
‘The potential return of Donald Trump as US president has caused uncertainties in markets across Asia. Given Donald Trump’s actions in his previous term, investors are justifiably concerned about the risk of tariffs and a renewed trade conflict with Asia. Such measures, if implemented, would weigh on currencies, businesses, consumer sentiment, economies and risk appetite in general. However, this potential impact should be weighed against the likely boost from the expected easing of interest rates by the Federal Reserve in the latter months of 2024,’ Cadby added.
abrdn Asian Income shares were down 2.6% to 206.60 pence each in London on Friday morning.
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