Asset manager abrdn has launched an Asia Pacific Dynamic Dividend Strategy to provide investors with access to the potential of the Asia Pacific region while offering a sustainable dividend yield.
The strategy is available to retail investors in Singapore and professional investors in Hong Kong.
David Hanzl, head of wholesale Apac, abrdn, said: “We are seeing a growing demand among investors for products that generate high income without compromising on capital growth by using excessively complex derivative instruments. This product builds on our success of running our Global Dynamic Dividend Strategy, by taking advantage of the tremendous growth opportunities present in the Asia-Pacific region to deliver long term capital appreciation and income for investors.”
The fund seeks to deliver capital growth while providing a reliable and sustainable yield. It follows an active bottom-up strategy, typically investing in 50 to 90 companies across the Asia-Pacific ex-Japan equity markets. With a strong emphasis on quality and yield, the fund ensures diversification across countries and sectors, benefiting from the region’s long-term growth drivers.
Emerging markets lead hedge fund gains
The strategy takes a dual approach to achieve its objectives of capital appreciation and sustainable yield. Approximately 95% of the portfolio is dedicated to high-quality, long-term investments aimed at generating both capital growth and dividends. The remaining portion is allocated to a dividend capture strategy, which tactically capitalizes on regular and special dividend opportunities. By analysing business cycles, asset disposals, and unique cash distributions, this approach boosts the overall yield of the fund.
Yoojeong Oh, investment director of Asian equities, abrdn, said: “Asia is an attractive place for both earnings and dividend growth. In fact, dividend reinvestment contributes to over half of the total returns earned by investors in Asia Pacific ex Japan. The region is underpinned by strong macroeconomic fundamentals, which support cash flow generation and upwards earnings revisions. This can help to sustain dividend payouts.
Whilst often overlooked as a pure growth market, more than half of the companies in Asia offer a dividend yield greater than 2.5% p.a. We see a growing trend across corporates to enhance total shareholder returns through more formalised dividend policies and share buyback programs.”
