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Schroders to drop Japan from far east income fund

Schroders is dropping Japan from the benchmark of its far east income fund after struggling to find income in the region.

Currently the fund has a reference benchmark of 10 per cent MSCI Japan and 90 per cent MSCI All Country Pacific excluding Japan.

From December 14, the fund will focus purely on investment in the Asia Pacific ex Japan region (including Australia and New Zealand) and will move into the IMA Asia Pacific ex Japan sector. It will be renamed the Schroder Asian income fund.

The fund was initially launched as a standard pan Asian fund but was changed to focus on income in December 2006.

At the Schroders investment conference fund manager Richard Sennitt who has overseen the £45m fund since 2001 said: “We included some Japan in the first place because we felt there was an opportunity to grow income in a Japanese perspective i.e. we know yields are low on the market but we think over time shareholder focus will improve and we’ll get better yields.

“Unfortunately there’s been no sign of that. In fact yields now in the market are lower than they were then which is very low. The upshot of the change is that we can buy much better income opportunities in the rest of Asia.”


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