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Edinburgh Dragon trust benefits from rising Asian equities | Trustnet Skip to the content

Edinburgh Dragon trust benefits from rising Asian equities

15 October 2010

The trust's profits to 31 August rose by 35 per cent, despite concerns about the global economic recovery.

By Lora Coventry,

Analyst, Financial Express

Aberdeen Asset Management's Edinburgh Dragon trust has reported an 35 per cent increase in profits in the year to 31 August. The trust benefitted from rising Asian equities despite fears that the global economic recovery might stall.

The net asset value (NAV) per share at the financial year end was 240.1p, up from the previous year's figure of 179.3p. The share price rose by 30.8 per cent to 219.0p in the period, reflecting a slight widening in the discount from 6.6 per cent to 8.8 per cent.

The fund was trading at a discount of five per cent on 15 October, according to Trustnet.

Performance vs sector to end of financial year

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Source: Financial Express Analytics

Financial Express data shows the trust outperforming its IT Asia Pacific Excluding Japan sector by five per cent in the period, while taking on a similar amount of risk.

"This fund has performed well for some time, and the latest results indicate it is set to continue," said Simon Elliott, investment trust analyst at Winterflood.

"The big bets the Aberdeen team have made in Edinburgh Dragon are their underweight position on China, and their overweight view on India. It's paid off, as Chinese equities seem to have been amongst the less exciting equity performers," he added.

Going forwards, the company's chairman Allan McKenzie said: "Asian stock markets are likely to remain volatile in the short term...because fund flows into Asia remain very much linked to what is happening in Western financial markets."

He added: "That said, Asia is not encumbered by the same structural problems as the debt-laden developed world. After a decade of austerity, large reserves of foreign exchange and solid fiscal foundations give policymakers a panoply of options."

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Data provided by FE fundinfo. Care has been taken to ensure that the information is correct, but FE fundinfo neither warrants, represents nor guarantees the contents of information, nor does it accept any responsibility for errors, inaccuracies, omissions or any inconsistencies herein. Past performance does not predict future performance, it should not be the main or sole reason for making an investment decision. The value of investments and any income from them can fall as well as rise.