Hugh Young’s Aberdeen Asian Income trust cuts fees

Hugh YoungHugh Young’s Aberdeen Asian Income trust has cut management fees on the fund from 1 per cent to 0.85 per cent.

The fee cut, which is effective from June 2016, follows a period of poor performance by the £372.6m trust.

Over the past five years to end of June, the trust’s net-asset-value total return was 46.2 per cent compared to the MSCI AC Asia Pacific ex-Japan Index return of 58.4 per cent.

In its half year trading update the firm says the trust’s discount to net asset value widened from 6.8 per cent at the start of the year to 7.2 per cent to end of June, reflecting lower client demand.

However, the firm says despite market gyrations, Young managed to avoid any shocks by keeping a lower exposure to China.

Chairman Peter Arthur says the 5 per cent exposure to China and Young’s avoidance of Chinese financial stocks had helped performance after “the sharp selloff” at the start of the year.

Arthur also says Young added companies with attractive valuations, such as Hong Kong developer Hang Lung Properties 

He also added Samsung Electronics, which promised shareholders improved returns and committed to paying out 30 to 50 per cent in dividends.

Arthur says: “Your manager took advantage of the volatile environment to add to quality companies at attractive valuations, and trim those that appeared overvalued, whilst improving the yield of the portfolio.

“While uncertainty continues to cloud the earnings outlook, your company’s holdings are expected to maintain steady dividend yields, given their robust operating cash flows.”

Hugh Young was recently fired as manager of St James’ Place’s Far East fund. He was replaced by Alistair Thompson and Martin Lau of First State Stewart Asia.