Martin Currie Asia Unconstrained Trust PLC (LON:MACP) aims to deliver growth in line with nominal Asia ex-Japan GDP on a rolling three-year basis. It follows a detailed, bottom-up approach to investing in a concentrated portfolio of 20–30 of Asia’s highest-quality and most sustainable businesses, unconstrained by a benchmark. Although market conditions have become more challenging for Asian equities, MCP’s manager Andrew Graham believes the portfolio’s high-quality companies are poised to do well in this environment. He also notes the trust’s performance is less volatile than the MSCI AC Asia ex-Japan index. A dividend policy change in 2017 allowing payment from capital reserves, in addition to revenue income, has materially increased MCP’s yield. Unlike one-off special dividends, it is the board’s intention for this higher overall payout to endure. At 4.9%, MCP’s dividend yield is one of the highest among peers.
Investment strategy: Thorough bottom-up approach
MCP follows a detailed bottom-up investment process to find companies with sustainable growth, strong management and a strategic market position. Graham is supported by a well-resourced team of six other portfolio managers/analysts who undertake detailed evaluation of a company’s fundamentals and governance structure to build high conviction in its potential investments. The result is a diversified portfolio of 20–30 companies with high returns on equity and strong balance sheets.
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