Liontrust Asia Income Fund

July 2018 portfolio changes

  • Sold – Gigabyte Technology. Shares in the Taiwanese company rose aggressively from October 2017 due to strong demand for its motherboards from crypto-currency miners. This was an unexpected boon to our investment thesis, but we were sceptical of the longevity of such demand even before the fall in crypto-currency valuations this year. We held the stock until it had paid its dividend, before taking profits on the position.
  • Bought – Wistron. Proceeds were reinvested in Wistron, a Taiwanese tech peer whose share price had weakened over the prior year at the same time as Gigabyte’s had rallied. High earnings growth is forecast for the company, which is benefitting from strong hyperscale server momentum as Facebook and Microsoft engage in aggressive capex. Servers are now around 20% of revenues and almost 60% of operating profit for Wistron via its 51% stake in subsidiary Wiwynn. Its share valuation is attractive with a 5% dividend yield and the prospect of 18% earnings growth this year. Earnings could accelerate in 2019, especially if the company wins design business from Amazon.

 

Key Risks 

Past performance is not a guide to future performance. Do remember that the value of an investment and the income generated from them can fall as well as rise and is not guaranteed, therefore, you may not get back the amount originally invested and potentially risk total loss of capital. Investment in Funds managed by the Asia team involves foreign currencies and may be subject to fluctuations in value due to movements in exchange rates. The Fund’s expenses are charged to capital. This has the effect of increasing dividends while constraining capital appreciation.  

Disclaimer

The information and opinions provided should not be construed as advice for investment in any product or security mentioned, an offer to buy or sell units/shares of Funds mentioned, or a solicitation to purchase securities in any company or investment product. Always research your own investments and (if you are not a professional or a financial adviser) consult suitability with a regulated financial adviser before investing. 

Monday, August 13, 2018, 5:15 PM