Three reasons to consider Schroder Asian Total Return for your portfolio

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Asian is an Investment Trust that aims to give you Asia's long-term growth with fewer of the bumps. It picks companies for both growth and dividends, and can use derivatives to soften sharp market falls.

Asian equities offer access to some of the world’s most dynamic economies and companies, but the journey can sometimes be bumpy. Asian is designed to capture Asia’s long-term growth potential while aiming to smooth out the region’s ups and downs. Here we outline three reasons why it may merit consideration.

1. Asia’s diversity creates opportunity

Asia’s long-term growth story is underpinned by powerful structural forces, including favourable demographics, rising incomes and deepening capital markets. Yet the region contains economies at very different stages of development – from highly advanced markets to faster-growing emerging economies.

Together, these characteristics have created one of the most diverse corporate landscapes in global equity markets, ranging from globally important technology leaders to rapidly growing domestic businesses.

For investors, this breadth creates multiple avenues for growth. However, Asian equity markets can be volatile and outcomes often vary widely between companies and sectors, making careful stock selection essential.

2.Smoother route to Asia growth

ATR has the flexibility to make selective use of derivatives (financial instruments that can be used to help cushion a portfolio when markets fall) to manage downside risks and reduce the impact of market volatilityDescribes the price movement of an investment or index. High volatility indicates frequent and significant price movement, whereas low volatility denotes less frequent or severe fluctuations in price., supporting its objective of delivering a smoother investment journey over time.

Alongside this, ATR seeks to capture the opportunities within Asia through a disciplined approach to stock selection. The portfolio is built by identifying companies with strong balance sheets, durable earnings and attractive long-term prospects, supported by fundamental research and deep regional expertise.

The strategy focuses on total return, combining capital growth with dividendA payment made by a company to its shareholders, typically representing a distribution of the company's profits. income, recognising that dividends have historically contributed a significant share of long-term equity returns. ATR has cultivated a strong track record through the careful selection of companies capable of delivering both long-term earnings growth and progressively rising dividends.

3. An environment where stock selection should matter

Asian equities have delivered strong returns in recent years, supported by resilient economic and corporate earnings growth and renewed investor interest in the region. However, as with other major markets such as the US, much of this performance has been driven by a relatively narrow group of companies. As a result, valuations in some parts of the market are now looking stretched, while many other businesses with attractive long-term prospects trade at more modest levels.

From here, Asia could increasingly reward careful stock selection, with returns depending less on broad market momentum and more on the ability to identify companies whose fundamentals are not yet fully reflected in their share prices. This suggests considerable scope for experienced managers with deep regional knowledge to add value while maintaining a balanced approach to risk.

ATR may appeal to investors seeking exposure to Asia’s growth potential who are wary of the region’s risk profile. For the latest information on portfolio positioning, performance and risks, please see the most recent updates on the Schroders website.

Discrete yearly performance

Source: Morningstar, net income reinvested, net of ongoing charges and portfolio costs and where applicable, performance fees (GBP).

Past Performance is not a guide to future performance. The value of investments and the income from them may go down as well as up and investors may not get back the amounts originally invested. Exchange rate changes may cause the value of any overseas investments to rise or fall.

Any sectors, securities, regions or countries shown above are for illustrative purposes only and are not to be considered a recommendation to buy or sell.

The forecasts included should not be relied upon, are not guaranteed and are provided only as at the date of issue. Our forecasts are based on our own assumptions which may change. Forecasts and assumptions may be affected by external economic or other factors.

Issued by Schroder Unit Trusts Limited, 1 London Wall Place, London EC2Y 5AU. Registered Number 4191730 England. Authorised and regulated by the Financial Conduct Authority.