Three reasons to consider Schroder AsiaPacific for your portfolio

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What is the Schroder AsiaPacific Fund, and is it worth considering? We explain how this actively managed Investment Trust aims to capture Asia's long-term growth, and why it could help diversify your portfolio.

For investors seeking long-term growth – whether building their own wealth or putting something aside for the younger generations – Asia remains one of the world’s most dynamic regions. The Schroder AsiaPacific Fund (SDP) is designed to provide core exposure to Asian growth through a focused, actively managed portfolio. Here we set out three reasons why it may warrant consideration.

1. Structural growth across a diverse region

In recent decades, Asia has grown significantly faster than developed markets, supported by industrialisation, rising incomes and expanding domestic consumption. While the region has experienced periods of 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., its broader trajectory has been one of economic expansion, deepening capital markets and improving governance standards.

Today, the region includes both relatively mature high-income economies and faster-growing markets with rising middle-class populations. This diversity provides a large and evolving opportunity set, ranging from global technology leaders to thriving domestic consumer and financial franchises.

Importantly, many of these opportunities remain at more reasonable valuations than those seen in markets such as the US, providing a sensible starting point for long-term growth.

2. A disciplined, on-the-ground approach to stock selection

Diversity is often accompanied by complexity, so investing successfully in Asia requires an understanding of the region’s wide differences in government policy, financial market structures and attitudes towards shareholders.

SDP draws on Schroders’ extensive Asian resources, with more than 40 analysts based across the region. This on-the-ground presence provides direct access to companies and local context, supporting the team’s assessment of individual business fundamentals, management quality, long-term prospects and associated risks.

Portfolio manager Abbas Barkhordar constructs the portfolio by selecting individual companies based on these fundamentals, with a strong emphasis on valuation and durable earnings growth. By focusing on companies whose long-term prospects are not fully reflected in their share prices, the trust aims to capture Asia’s structural growth while managing downside risks.

3. An environment where selectivity should matter

Recent research from Boring Money found that four out of ten investors making changes to their portfolios were deliberately seeking diversificationThe process of spreading your investment portfolio across different asset classes, such as partially in shares and partially in bonds, in order to reduce risk. across regions and asset classes. Asia offers a credible alternative for investors looking to reduce their reliance on the US. The region is home to many of the world’s leading technology companies that sit right at the heart of the artificial intelligence (AI) development story. But the opportunity set extends well beyond technology, encompassing other export sectors as well as businesses benefiting from expanding domestic demand.

Such breadth has historically meant that Asia rewards active management. Benefiting from more than 30 years of disciplined stock picking, SDP provides selective exposure to Asia’s diverse growth drivers. With a portfolio built around valuation discipline and durable earnings growth, the trust is well placed to capture the best of Asia’s long-term potential.

SDP may suit long-term investors seeking core exposure to Asian equities within a diversified portfolio who are comfortable with the higher volatility often present in emerging markets. For the latest information on portfolio positioning, performance and risks, please see the most recent Schroder AsiaPacific Fund 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.