In an announcement, the board said the company’s outperformance compared to its peers in both the Asia Pacific Income and broader Asia Pacific Growth sectors over one, three and five years had led to high levels of investor demand.
To appease this, the board is considering further issuance of new shares, including a possible issue of C shares.
The fund , run by Hugh Young’s Asian equities team, has returned 18.9% over one year, compared to -5.2% from the MSCI Asia Pacific ex Japan index. Over three years it has returned 96.8%, versus 34.8% from the benchmark.
A spokesperson from Aberdeen explained the company was restricted to issuing 15% of share capital per year as ordinary shares and in order to provide a significant amount to market C-shares would have to be issued. After a few months C-shares are converted into ordinary shares so new investors would have the same rights as other shareholders, he added.
It should be noted C-shares can have higher ongoing expenses, however, and so might not suit longer-term investors.
Ongoing income potential
In his assessment of the income potential in Asia, managing director of Aberdeen Asset Management Asia Hugh Young, said: “Companies in Asia have been growing their dividends during the past decade. Over half of all listed companies increased dividends by 10% or more in any given year over 2000-11 thanks largely to solid earnings growth and an increasingly strong shareholder culture.
"Longer term the Asia Pacific region will continue to offer investors with the opportunity to diversify their sources of income from the traditional UK equity, fixed income and property sectors. At the same time, investors can gain exposure to the superb growth potential of Asian companies."
A recent analyst note from Oriel Securities on Aberdeen Asian Income’s recent half-year results said the premium for its shares was worth paying.
“High exposure to Thailand (135) and Australia (23%) and low China exposure (7%) drive relative and absolute performance. Outperformance resulted from being defensively positioned with a bias towards the telecoms and consumer sectors.
“If looking for long term income growth in Asia, Aberdeen Asian Income Fund is a core choice alongside Schroder Oriental Income and Henderson Far East Income. Aberdeen Asian Income not only cuts the mustard relative to these other to funds, but also globally, over time, in our view justifying its superior 5% premium rating,” concluded Tom Tuite Dalton, contributing analyst at Oriel Securities.
