Ask The Experts: Investing In Yield For Both Income And Capital Appreciation
Yap Sze Sze, Product Manager of Asia ex-Japan Equities at Schroder Investment Management, shares with Fundsupermart the investment philosophy behind the Schroder Asian Equity Yield Fund, and how it aims to offer investors exposure to good quality companies with high dividend yields.
First of all, can you tell us a bit more about the investment philosophy and strategy of the Schroder Asian Equity Yield Fund?
- Yield-focused equity fund, though not only centred on income
- Diversified approach to yield investing; does not just target companies that pay high dividends
- Also takes into account sustainability of dividends and growth prospects of the dividend streams
Why should investors choose an Asian equity dividend-focused fund?
- Low interest rates offered by banks
- Strong valuations and strong long-term growth prospects for the Asian region
- Investing in stocks that pay dividends means a regular income and capital appreciation over the longer term
Dividend-focused funds have been rather popular on our platform. What makes the Schroder Asian Equity Yield Fund special?
- Strategy behind Schroder Asian Equity Yield Fund has been in place since 2002 in Hong Kong and subsequently brought to Singapore in 2005
- Strong belief that such a strategy has long-term place in an investorâs portfolio
- Yield-focused fund will have a bias towards quality companies, giving rise to a less volatile way to gain exposure to equities
Are there any specific sectors or countries the fund is particularly positive on?
- From a yield perspective, the fund is positive on developed markets such as Hong Kong, Australia and Singapore
- Also maintain meaningful exposure to ASEAN markets though many of them have run up this year and hence less attractive from a valuation perspective
Conversely, are there any investment ideas the fund is not keen to pursue?
- From a yield perspective, there are markets that historically pay lower dividends such as Korea
- Certain defensive sectors such as utilities and telcos are also looking expensive from a valuation standpoint
||: Ask The Experts: Investing In Yield For Both Income And Capital Appreciation