Jason Pidcock’s Newton Asian Income fund has almost doubled in size in the past 12 months, sending assets under management (AUM) to more than £1bn.
"We’re getting big inflows almost every single day," said Pidcock, who has headed up the fund since it was launched in November 2005. "We anticipate that the fund’s size will continue to grow for the foreseeable future."
With one of the best records in the entire Asia Pacific ex Japan sector since inception, it is easy to see why Newton Asian Income is one of the fastest-growing funds in the unit trust and OEIC universe.
As well as being a top-decile performer in terms of returns over one-, three- and five-year periods, Pidcock’s fund is one of the least volatile in the sector and has the second highest one-year historic yield of 7.15 per cent.
With returns of 4.69 per cent, it is the only Asia Pacific ex Japan fund that has managed to break even so far this year.
Performance of fund vs sectors and index over 5-yrs
| Name |
1-yr returns (%) |
3-yr returns (%) |
5-yr returns (%) |
| Newton Asian Income |
4.69 |
131.91 |
86.06 |
| FTSE Asia Pacific ex Japan |
-9.17 |
95.81 |
63.31 |
| IMA Asia Pacific ex Japan |
-10.91 |
86.65 |
56.04 |
| IMA UK Equity Income |
-1.08 |
47.29 |
-1.1 |
Source: FE Analytics
Its record is even more impressive when compared with the IMA UK Equity Income sector. No fund has come close to matching the returns of Newton Asian Income over three- or five-year periods, and, despite the poor performance of Asian markets in the last year, only six UK Equity Income funds have beaten it in the past 12 months.
Moreover, only Insight Equity Income Booster and Elite Charteris Premium Income are currently yielding more than Newton Asian Income.
Although the Asian markets are traditionally less transparent than in the UK, Pidcock’s fund has been less volatile than the average UK Equity Income fund in the last 12 months. Over three and five years, it is only marginally more volatile.
It currently has an FE Risk Score of 79, making it substantially less risky than the FTSE 100.
Pidcock says he expects Asian income to become a bigger part of investors' portfolios in the near future.
"Asian income has captured the imagination of many investors in recent years, but it is still early days," he said. "At the end of 2010, 26 per cent of global companies yielding more than 3 per cent were listed in Asia. Only 8 per cent came from the UK."
"With three times as many companies to chose from, I think Asian income is bound to challenge UK income in the coming years."
While there are a handful of Asian income funds on the market, including the likes of Schroder Asian Income and Henderson Dividend Income, Pidcock’s vehicle has the most established track record.
"My first job in fund management back in 1993 was on one of the first Asian income vehicles on the market," he said. "I have a lot of experience in this area, and I think investors appreciate that."
Pidcock and co-manager Caroline Keen target relatively defensive companies that have a stable dividend pay-out ratio. Telecoms, toll road, property and technology companies make up a big part of the portfolio.
The fund has exposure to 11 countries in Asia, as well as a 29 per cent position in Australia.
Performance of fund vs sectors and index over 5-yrs
Source: FE Analytics
Managing director of Nexus IFA Kerry Nelson says Newton Asian Income is a core holding for most of her clients.
"This has been a strong performer from day one," she said. "It’s been one of my most consistent holdings in the last few years."
“It has got a very high yield, but this doesn’t seem to have hampered its capital returns."
"With all the troubles in the developed world, I think global equity income is going to become more and more important."