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Scope for narrower discount

Martin Currie Asia Unconstrained Trust 23 November 2017 Review
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Martin Currie Asia Unconstrained Trust

Scope for narrower discount

Investment trusts

23 November 2017

Price

411.0p

Market cap

£148.5m

AUM

£167.6m

NAV*

464.0p

Discount to NAV

11.4%

NAV**

472.2p

Discount to NAV

13.0%

*Excluding income. **Including income. As at 21 November 2017. As at 21 April 2017.

Yield

4.0%

Ordinary shares in issue

36.1m

Code

MCP

Primary exchange

LSE

AIC sector

Asia Pacific ex-Japan

Benchmark

Asian GDP growth

Share price/discount performance

Three-year performance vs index

52-week high/low

411.0p

313.0p

472.2p

372.7p

**Including income.

Gearing

Gross*

3.1%

Net*

0.9%

*As at 30 September 2017

Analysts

Helena Coles

+44 (0)20 3077 5700

Mel Jenner

+44 (0)20 3077 5720

Martin Currie Asia Unconstrained Trust is a research client of Edison Investment Research Limited

Martin Currie Asia Unconstrained Trust (MCP) aims to generate returns at least in-line with Asia ex-Japan nominal GDP growth. It follows a bottom-up approach to stock-picking and uses detailed ‘forensic accounting’ assessments to build a high-conviction portfolio of 20 to 30 stocks, with a long-term view. The trust has persistently traded at a deep discount, but there is scope for this to narrow following a recent change in the dividend policy, which has lifted its yield to 4.0%, while maintaining the investment strategy. MCP’s yield now compares favourably against peers and could attract new interest from income focused investors.

12 months ending

Share price
(%)

NAV
(%)

Blended
benchmark* (%)

MSCI AC Asia ex-Japan (%)

3Y GDP growth Asia ex-Japan (%)

31/10/13

18.7

14.1

17.9

10.8

13.9

31/10/14

(1.5)

0.0

1.6

6.4

10.1

31/10/15

(6.9)

(8.4)

7.7

(3.6)

7.7

31/10/16

32.9

34.9

8.6

35.2

8.6

31/10/17

19.0

16.3

10.8

20.3

10.8

Source: Thomson Datastream, IMF, Edison Investment Research. Note: All % on a total return basis in GBP. *Blended benchmark is MSCI AC Asia Pacific Index (Japan fixed at 40%) until 30 June 2008, MSCI AC Asia Pacific Index from 1 July 2008 to 30 June 2011, MSCI AC Asia Pacific Index (Japan fixed at 25%) from 1 July 2011 to 10 July 2014, and three-year rolling nominal Asian GDP growth from 11 July 2014.

Investment strategy: Forensic, bottom-up approach

Lead manager, Andrew Graham and his team seek to identify 20 to 30 high-conviction stocks, across a broad range of sectors, which exhibit financial strength, sound management and good corporate governance. Stocks are purchased with a ‘buy and hold’ view, which is reflected in MCP’s low turnover, typically 12-13% pa. To support this high-conviction approach, the investment process involves rigorous bottom-up analysis by a team of experienced specialists, involving ‘forensic accounting’ assessments.

Market outlook: Favourable outlook for Asia

The economic backdrop of synchronous global growth and easy monetary conditions is favourable for Asian equities. Asian GDP growth is expected to continue to outpace global growth, underpinned by favourable demographic and urbanisation trends, and a rapidly growing middle-class driving consumption. Meanwhile, strong and reform-minded leaders are driving higher public spending trends across the region. Together, these factors augur well for a continued earnings recovery in the region.

Valuation: Attractive dividend may narrow discount

MCP currently trades at a 13.0% discount to cum-income NAV. The board is committed to narrowing the trust’s discount and implemented a change in dividend policy in April 2017, allowing an additional payment from capital. This has effectively increased the FY17 dividend by 110% over the previous year, bringing MCP’s yield to 4.0%, which compares favourably against the peer group. This change and the board’s ongoing activities to promote the trust could lead to a narrowing of MCP’s discount.

Exhibit 1: Trust at a glance

Investment objective and fund background

Recent developments

Martin Currie Asia Unconstrained Trust aims to achieve returns commensurate with Asia ex-Japan nominal GDP growth, unconstrained by an equity benchmark, over a long-term time horizon from a concentrated portfolio of 20-30 stocks. Before its change of investment objective in July 2014, it invested in a pan-Asian portfolio with a benchmark of MSCI AC Asia Pacific (Japan fixed at 25%).

5 July 2017: AGM – shareholders approved proposed changes to the dividend policy, allowing additional payments from capital.

25 May 2017: Annual report for 12 months ending 31 March 2017. NAV TR +33.5% versus benchmark TR+9.3%. Share price TR +33.5%.

4 April 2017: Proposed change in dividend policy, subject to shareholder approval at July 2017 AGM.

Forthcoming

Capital structure

Fund details

AGM

July 2018

Ongoing charges

FY17 1.1% (see page 7)

Group

Martin Currie Investment Management

Interim results

November 2017

Net gearing

1.3%

Manager

Andrew Graham

Year end

31 March

Annual mgmt fee

Tiered, 0.60-0.75% of net assets

Address

Saltire Court, 20 Castle Terrace,

Edinburgh EH1 2ES

Dividend paid

December and August

Performance fee

None

Launch date

1985

Trust life

Indefinite

Phone

0131 229 5252

Continuation vote

Three-year, next in 2018

Loan facilities

£15m (see page 7)

Website

www.martincurrie.com/uk/asia-unconstrained-trust

Dividend policy and history (financial years)

Share buyback policy and history (financial years)

MCP pays dividends twice a year in December and August. MCP has recently changed its dividend policy (see details on page 7).

MCP is authorised to repurchase up to 14.99% and allot up to 5% of its ordinary shares. A tender offer for 10% of the issued shares was made in July 2014.

Shareholder base (as at 31 October 2017)

Portfolio exposure by sector (as at 31 October 2017)

Top 10 holdings (as at 31 October 2017)

Portfolio weight %

Company

Country

Sector

31 October 2017

31 October 2016*

Tencent Holdings

China

Information technology

7.5

5.9

Samsung Electronics

South Korea

Information technology

7.3

5.8

AIA

Hong Kong

Financials

7.1

7.8

Taiwan Semiconductor

Taiwan

Information technology

6.1

7.8

HSBC

Hong Kong

Financials

5.1

5.0

Global Logistic Properties

Singapore

Real estate

4.6

N/A

Tata Consultancy Services

India

Information technology

4.6

5.1

China Mobile

China

Telecommunications

4.1

5.8

ENN Energy

China

Utilities

4.1

N/A

United Overseas Bank

Singapore

Financials

4.0

N/A

Top 10

54.5

56.9

Source: Martin Currie Asia Unconstrained Trust, Edison Investment Research, Bloomberg, Thomson Reuters. Note: *N/A where not in October 2016 top 10.

Market outlook: Good environment for Asian equities

The economic backdrop has been favourable for Asian equities, with synchronous global growth, abundant liquidity and low interest rates. Central banks around the world have started, or are poised, to raise interest rates and reduce the size of their balance sheets; however, this should happen gradually and cautiously, leaving monetary conditions relatively benign for the time being.

As shown in Exhibit 2 (LHS), the IMF expects economic growth in Asia for the five years 2017-22 to moderate to 6.4% pa from 7.7% pa between 2007 and 2016. Nevertheless, this level of growth is significantly greater than is forecast for global GDP, and more than triple the level expected for advanced economies. Asian growth continues to be supported by a number of secular factors, including favourable demographics, urbanisation trends and a rising middle-class. Meanwhile, the political backdrop is also relatively favourable with strong and reform-minded leaders supportive of higher public spending. Examples include Xi Jinping in China and Narendra Modi in India, who lead the two fastest growing and most populous countries. Both countries benefit from well-consolidated political mandates, which will help support the implementation of ambitious economic and reform plans for their respective nations.

Asian stock markets have performed strongly since the beginning of 2016 and are now at valuations that are no longer cheap, approaching a forward P/E multiple of 14x. However, as shown in the right hand chart of Exhibit 2, Asia represents relative value when compared to global equities, trading at steep 15.7% discount to the World index.

Exhibit 2: Emerging Asia vs advanced and world markets – GDP growth and valuation metrics

GDP growth rates – emerging Asia vs advanced economies and world

DS Asia ex-Japan vs DS World valuation comparison

Source: IMF WEO October 2017, Thomson Datastream, Edison Investment Research

Fund profile: Unconstrained, high-conviction

MCP is not constrained by a benchmark; instead, its objective is to generate returns that are at least in-line with Asia ex-Japan’s nominal GDP growth (on a rolling three-year basis). MCP adopted Martin Currie’s successful Asia Long-Term Unconstrained (ALTU) mandate, managed by Andrew Graham, in July 2014. The ALTU strategy aims to achieve its objective through investing, with a long-term horizon, in a concentrated, high-conviction portfolio of c 20 to 30 companies with high and sustainable returns. The managers follow a rigorous bottom-up strategy led by Graham, and a team of six Asia investment specialists based in Edinburgh and Asia. All ALTU strategies are managed in essentially the same way and by the same team, accommodating for mandate specific variations, which in the case of MCP as an investment trust, allows for gearing and dividend payments. The combined assets of the ALTU strategies are c £2bn.

The fund manager: Andrew Graham and team

The manager’s view: Positive prospects for earnings recovery

Andrew Graham believes the environment is favourable for Asian equities and, in particular, for the ALTU strategy. A global bias for tightening notwithstanding, companies should still benefit from “benign growth” in economies and low interest rates. While there will be companies with weaker businesses and balance sheets that could suffer as interest rates rise, these are not the types of companies that are investment candidates for MCP. Meanwhile, the manager believes the earnings recovery in Asia will likely continue and observes the ratio of earnings upgrades to downgrades is at its most favourable in the past seven to eight years. Nine of twelve countries observed are showing a positive earnings revision trend. Furthermore, the improvement in earnings is getting more broad-based, having initially been polarised among several large names in the technology sector. MSCI consensus earnings expectations for 2017 are around +22% and just +12% for 2018. However, Graham believes Asia’s earnings recovery cycle is far from mature and expects consensus estimates to be revised upwards over the coming quarters. This should be positive for Asian equities.

The manager notes Asia is benefitting from reform-minded leaders. Public spending in the region has been rising in many countries including China, India, Thailand, Indonesia and Malaysia, but he believes the positive economic impact from these investments are yet to be felt. Most of the investment has been in infrastructure, which augurs well for future economic growth and corporate earnings. Graham is particularly excited about rising consumption in Asia, underpinned by urbanisation, rising incomes and the rapid expansion of a populous middle-class. He believes rising Asian consumption is a secular, multi-decade investment theme and a significant engine of global growth.

Valuations have recovered from the depressed levels seen some 18 months ago, however, the manager thinks Asia offers good value compared with many other asset classes, in particular US and Japan equities. Measured on a prospective P/E basis, Asian markets appear in-line with to slightly more expensive than their long-term averages, but not to an extent that causes Graham to worry. On other valuation metrics, such as P/BV and EV/EBITDA, Asia appears less stretched. Earnings prospects are attractive, while returns on equity (ROE) have been improving and are now comparable with those of global equities, after a prolonged period of sub-par returns.

Asset allocation

Investment process: Forensic approach to analysis

With less than 30 holdings in the portfolio against a universe of stocks of around 1,200 names, the investment process is highly selective and based on fundamentals. The manager aims to find companies that have the potential for long-term cash generation, can deliver returns above their cost of capital, and are allocating capital efficiently. Visiting companies and meeting managements are an important part of the investment process. Around 200 companies pass the manager’s initial screening to form the investible universe. These are subject to rigorous fundamental assessment and around 10 to 25 companies a year undergo a further ‘forensic analysis’ to be considered for the portfolio. This exercise involves a detailed review of five years of financial statements, focusing on the quality of earnings and health of balance sheets to generate an ‘accounting diagnostic report’. The manager estimates around 250 man-hours of specialist analysts’ time is expended on this process, reflecting the resources available to MCP. Integrated into this analysis is a deep understanding of a company’s fundamental growth drivers and its management’s approach to corporate governance and alignment of interests with minority shareholders. This in-depth process allows the manager to construct a portfolio of 20 to 30 high-conviction investments in which it takes a long-term ‘buy and hold’ position. Risk is mitigated through the in-depth understanding of each company, ongoing monitoring of the companies and portfolio diversification. Although the portfolio is concentrated, correlation between stocks is low.

Current portfolio positioning

As at end October 2017, MCP held 26 stocks with the top 10 positions accounting for 54.5% of the portfolio. Consistent with the manager’s long-term investment horizon and stock selection discipline, there has been little portfolio activity over the past six months, although there are several investment candidates under consideration. MCP’s portfolio turnover is typically 12-13% pa.

The most recent purchase was Hong Kong-listed Guangdong Investment (GDI) in April 2017. GDI is a conglomerate whose main business is supplying natural water to Hong Kong. The company has predictable and strong cash flow, supporting a generous dividend yield, which the manager believes will likely increase over time. Management exhibits good capital deployment discipline, requiring investments to meet a minimum rate of return. The purchase was funded through the sale of Hong Kong energy utility, Hong Kong & China Gas on the grounds of expensive valuation, and Macau casino operator SJM Holdings (SJM). SJM’s business environment has been more challenging than anticipated over recent years due to China policy changes, while risks are rising as the company embarks on a large, multi-year construction commitment.

The largest sector within the portfolio is information technology at 29.3% and the two largest holdings are Tencent Holdings and Samsung Electronics. As shown in Exhibit 1, together they account for 14.8% of the portfolio, up from 11.7% a year ago, largely due to strong performance. Although these technology companies (alongside the portfolio’s fourth largest holding, Taiwan Semiconductor Manufacturing) have performed strongly, and are now very large, the manager believes their economies of scale significantly enhances their long-term potential and profitability. Reflecting Graham’s positive views for rising Asian consumption trends, the second largest exposure in the portfolio is to the consumer discretionary sector, at 21.8% of the portfolio.

Compared to the MSCI Asia ex-Japan index, as shown in Exhibit 4, the MCP portfolio is more expensively valued than the index in forward P/E and EV/EBITDA terms, although it has a lower price-to-book ratio. It also exhibits higher ‘quality’ characteristics, including stronger balance sheets with aggregate net cash, and higher returns on equity and dividend yield.

Exhibit 3: Geographical exposure at 31 October 2017

Exhibit 4: Portfolio characteristics

MCP portfolio

MSCI AC Asia ex-Japan Index

Forward P/E* (x)

15.3

13.4

Price/book (x)

2.2

2.7

Yield (%)

2.9

2.4

EV/EBIT (x)

11.7

12.1

EV/EBITDA (x)

8.5

7.6

Net debt/(cash) to equity (%)

(8.6)

17.1

Return on equity* (%)

14.5

12.9

Source: Martin Currie Asia Unconstrained Trust, Edison Investment Research. Note: Net of gearing.

Source: Martin Currie and UBS PAS, as at 31 October 2017. Note: *Indicates consensus.

Exhibit 3: Geographical exposure at 31 October 2017

Source: Martin Currie Asia Unconstrained Trust, Edison Investment Research. Note: Net of gearing.

Exhibit 4: Portfolio characteristics

MCP portfolio

MSCI AC Asia ex-Japan Index

Forward P/E* (x)

15.3

13.4

Price/book (x)

2.2

2.7

Yield (%)

2.9

2.4

EV/EBIT (x)

11.7

12.1

EV/EBITDA (x)

8.5

7.6

Net debt/(cash) to equity (%)

(8.6)

17.1

Return on equity* (%)

14.5

12.9

Source: Martin Currie and UBS PAS, as at 31 October 2017. Note: *Indicates consensus.

Performance: Lower-risk returns

MCP’s objective is to achieve returns commensurate to Asia ex-Japan nominal GDP growth. Its NAV total return has meaningfully outperformed its blended benchmark for all periods shown in Exhibit 7, with the exception of three months, however, it has lagged the MSCI AC Asia ex-Japan index. Annual volatility, though, is lower compared to the index. Exhibit 5 shows data for the ALTU strategy since its inception in October 2008, which MCP adopted in July 2014. The chart shows annual volatility for the ALTU strategy over this period at 12.9%, versus the index at 17.3%. It has participated in much of the market gains in months when returns were positive, and participating in a smaller proportion of market losses in months with negative returns.

Exhibit 5: ALTU NAV volatility and upside/downside participation to 31 October 2017

Exhibit 6: Price, NAV and blended benchmark total return performance (%)

Source: Martin Currie Asia Unconstrained Trust. Note: ALTU strategy inception date is 31 October 2008.

Source: Thomson Datastream, Martin Currie Asia Unconstrained Trust. Note: Three- and five-year and since change of strategy (SC) performance is annualised. Data to 31 October 2017.

Exhibit 7: Share price and NAV total return performance, relative to indices (%)

 

One month

Three months

Six months

One year

SC

Three years

Five years

Price relative to blended benchmark

2.4

(3.6)

1.5

7.4

17.3

13.6

10.9

NAV relative to blended benchmark

3.7

(1.9)

3.7

4.9

17.0

10.8

5.6

Price relative to MSCI AC Asia ex-Japan

(2.2)

(5.7)

(7.0)

(1.0)

(5.9)

(6.0)

(6.9)

NAV relative to MSCI AC Asia ex-Japan

(1.0)

(4.1)

(5.1)

(3.3)

(6.2)

(8.3)

(11.3)

Price relative to MSCI World

0.4

(4.2)

0.4

4.9

(4.9)

(4.9)

(20.1)

NAV relative to MSCI World

1.8

(2.6)

2.5

2.4

(5.2)

(7.3)

(23.9)

Source: Thomson Datastream, Edison Investment Research. Note: Data to 31 October 2017. Geometric calculation. SC = since change of investment objective on 11 July 2014.

Discount: Policy change may lead to a lower discount

MCP currently trades on a discount to cum-income NAV of 13.0%, close to the three-year average of 13.6%, and well within the range of 7.6% to 20.9%. The board is committed to managing the trust’s discount and in April 2017, in response to investors’ appetite for yield, proposed a new dividend policy to pay a distribution of capital of 2% of year-end NAV in addition to the existing distribution from revenue income. This effectively more than doubled the dividend yield, with no change to the investment strategy. MCP now has one of the highest yields amongst its peers (see Exhibit 9), which may attract new investors with a focus on income without alienating its existing shareholder base, and lead to a narrowing of the discount over time. The board also has the ability to repurchase and cancel shares to help manage the discount; however, no repurchases have taken place since June 2016.

Exhibit 8: Share price discount to NAV (including income) over three years (%)

Source: Thomson Datastream, Edison Investment Research

Capital structure and fees

MCP is a conventional investment trust with one class of share; there are currently 36.1m ordinary shares outstanding and a further 3.4m shares held in treasury. The trust has the authority (renewable annually) to buy back up to 14.99% of shares in issue, although the last repurchases were in June 2016 (see Exhibit 1). MCP has a £15m loan facility with RBS and as at end-September 2017, the company had gross gearing of 3.2% and net gearing of 1.3%.

Martin Currie is paid an annual management fee, which is calculated quarterly, of 0.75% of net assets up to £150m and 0.60% on net assets above £150m. This is allocated one-third to revenue and two-thirds to capital to reflect the board’s expected long-term split of returns in terms of income and capital gains. For the FY17 ended March 2017, the ongoing charge was 1.1%.

Dividend policy and record

MCP pays dividends twice a year in December and August. A new dividend policy was approved at the July 2017 AGM to make payments from capital, set at 2% of the company’s year-end ex-income NAV. The dividend from capital is payable in August and will be in addition to dividends from revenue income, payable in December and August. There is no change to the investment policy and the manager will retain all elements of the ALTU strategy without shifting focus to meet higher income needs. The effect of the new policy has been to increase the FY17 dividend to 16.28p from 7.75p in FY16, doubling the yield to around 4%. The board intends for this new policy to endure, however, it is subject to review in the event of changes in market conditions or shareholder expectations, and in the event the trust incurs a financial year capital loss.

Peer group comparison

MCP adopted the ALTU strategy, managed by Andrew Graham, in July 2014, therefore the most relevant peer group comparison periods shown in Exhibit 9 are one and three years. The trust’s NAV total return over one year is slightly above the peer group average, ranking seventh out of 15 trusts. MCP’s dividend yield of 4.0% ranks fifth among peers, although it is broadly comparable with the income focused funds, which yield between 3.6% and 5.5%. Although narrowing since April 2017, the trust’s discount to NAV remains wider than the rest of its peers.

Exhibit 9: AIC Asia Pacific ex-Japan peer group as at 22 November 2017*

% unless stated

Market cap £m

NAV TR
1 year

NAV TR
3 year

NAV TR
5 year

NAV TR 10 year

Discount (ex-par)

Ongoing charge

Perf.
fee

Net gearing

Dividend yield (%)

Martin Currie Asia Unconstrained

148.5

27.3

46.0

68.4

76.0

(11.6)

1.1

No

101

4.0

Aberdeen Asian Income

399.0

17.1

32.8

48.0

212.2

(6.9)

1.2

No

108

4.3

Aberdeen Asian Smaller

366.2

11.3

27.8

55.4

296.0

(11.2)

1.7

No

110

1.1

Aberdeen New Dawn

280.2

27.4

42.7

60.3

158.3

(11.5)

0.9

No

109

1.8

Edinburgh Dragon

711.8

22.8

41.0

58.7

169.1

(12.5)

1.0

No

104

0.9

Fidelity Asian Values

261.3

11.9

61.7

107.9

160.8

(6.0)

1.3

No

100

1.2

Henderson Far East Income

447.7

17.9

39.5

61.3

128.1

2.3

1.1

No

105

5.5

Invesco Asia

216.1

31.8

67.8

120.5

212.7

(9.3)

1.0

No

100

1.4

JPMorgan Asian

355.6

41.5

80.5

112.3

106.3

(11.8)

0.8

No

100

4.5

Pacific Assets

303.3

12.7

39.5

90.0

101.0

(4.8)

1.3

No

100

0.9

Pacific Horizon

179.9

52.2

75.0

113.2

124.0

(9.3)

1.1

No

108

0.0

Schroder Asia Pacific

792.8

38.2

74.2

107.1

198.0

(9.9)

1.1

No

107

1.0

Schroder Asian Total Return Inv. Co

291.6

38.8

81.6

107.0

148.0

1.2

1.0

Yes

110

1.6

Schroder Oriental Income

647.9

15.5

48.4

84.3

201.4

2.9

0.9

Yes

100

3.6

Scottish Oriental Smaller Cos

327.2

15.7

37.5

79.4

295.3

(11.5)

1.2

Yes

100

1.1

Average

381.9

25.5

53.1

84.9

172.5

(7.3)

1.1

104

2.1

Rank in sector (out of 15 trusts)

15

7

8

10

15

13

6

9

5

Source: Morningstar, Edison Investment Research. Note: *Performance data to 20 November 2017. TR=total return. Net gearing is total assets less cash and equivalents as a percentage of net assets.

The board

MCP’s board consists of five independent non-executive directors. Harry Wells, chairman, was appointed to the board in 2003 and assumed his current role in 2014. Gregory Shenkman, appointed in 2007, is the senior independent director. Peter Edwards was appointed in 2007 and Anja Balfour in 2012. The most recent appointment in 2015 is Martin Shenfield. The directors have backgrounds in asset management, finance and law.

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Copyright 2017 Edison Investment Research Limited. All rights reserved. This report has been commissioned by Martin Currie Asia Unconstrained Trust and prepared and issued by Edison for publication globally. All information used in the publication of this report has been compiled from publicly available sources that are believed to be reliable; however we do not guarantee the accuracy or completeness of this report. Opinions contained in this report represent those of the research department of Edison at the time of publication. The securities described in the Investment Research may not be eligible for sale in all jurisdictions or to certain categories of investors. This research is issued in Australia by Edison Investments Pty Ltd (Corporate Authorised Representative (ACH 161 453 872) of Myonlineadvisers Pty Ltd (AFSL: 427484) and any access to it, is intended only for "wholesale clients" within the meaning of the Corporations Act 2001 of Australia. The Investment Research is distributed in the United States by Edison US to major US institutional investors only. Edison US is registered as an investment adviser with the Securities and Exchange Commission. Edison US relies upon the "publishers' exclusion" from the definition of investment adviser under Section 202(a)(11) of the Investment Advisers Act of 1940 and corresponding state securities laws. As such, Edison does not offer or provide personalised advice. We publish information about companies in which we believe our readers may be interested and this information reflects our sincere opinions. The information that we provide or that is derived from our website is not intended to be, and should not be construed in any manner whatsoever as, personalised advice. Also, our website and the information provided by us should not be construed by any subscriber or prospective subscriber as Edison’s solicitation to effect, or attempt to effect, any transaction in a security. The research in this document is intended for New Zealand resident professional financial advisers or brokers (for use in their roles as financial advisers or brokers) and habitual investors who are “wholesale clients” for the purpose of the Financial Advisers Act 2008 (FAA) (as described in sections 5(c) (1)(a), (b) and (c) of the FAA). This is not a solicitation or inducement to buy, sell, subscribe, or underwrite any securities mentioned or in the topic of this document. This document is provided for information purposes only and should not be construed as an offer or solicitation for investment in any securities mentioned or in the topic of this document. A marketing communication under FCA rules, this document ha
s not been prepared in accordance with the legal requirements designed to promote the independence of investment research and is not subject to any prohibition on dealing ahead of the dissemination of investment research. Edison has a restrictive policy relating to personal dealing. Edison Group does not conduct any investment business and, accordingly, does not itself hold any positions in the securities mentioned in this report. However, the respective directors, officers, employees and contractors of Edison may have a position in any or related securities mentioned in this report. Edison or its affiliates may perform services or solicit business from any of the companies mentioned in this report. The value of securities mentioned in this report can fall as well as rise and are subject to large and sudden swings. In addition it may be difficult or not possible to buy, sell or obtain accurate information about the value of securities mentioned in this report. Past performance is not necessarily a guide to future performance. Forward-looking information or statements in this report contain information that is based on assumptions, forecasts of future results, estimates of amounts not yet determinable, and therefore involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of their subject matter to be materially different from current expectations. For the purpose of the FAA, the content of this report is of a general nature, is intended as a source of general information only and is not intended to constitute a recommendation or opinion in relation to acquiring or disposing (including refraining from acquiring or disposing) of securities. The distribution of this document is not a “personalised service” and, to the extent that it contains any financial advice, is intended only as a “class service” provided by Edison within the meaning of the FAA (ie without taking into account the particular financial situation or goals of any person). As such, it should not be relied upon in making an investment decision. To the maximum extent permitted by law, Edison, its affiliates and contractors, and their respective directors, officers and employees will not be liable for any loss or damage arising as a result of reliance being placed on any of the information contained in this report and do not guarantee the returns on investments in the products discussed in this publication. FTSE International Limited (“FTSE”) © FTSE 2017. “FTSE®” is a trade mark of the London Stock Exchange Group companies and is used by FTSE International Limited under license. All rights in the FTSE indices and/or FTSE ratings vest in FTSE and/or its licensors. Neither FTSE nor its licensors accept any liability for any errors or omissions in the FTSE indices and/or FTSE ratings or underlying data. No further distribution of FTSE Data is permitted without FTSE’s express written consent.

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

295 Madison Avenue, 18th Floor

10017, New York

US

Sydney +61 (0)2 8249 8342

Level 12, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

295 Madison Avenue, 18th Floor

10017, New York

US

Sydney +61 (0)2 8249 8342

Level 12, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

Edison is an investment research and advisory company, with offices in North America, Europe, the Middle East and AsiaPac. The heart of Edison is our world-renowned equity research platform and deep multi-sector expertise. At Edison Investment Research, our research is widely read by international investors, advisers and stakeholders. Edison Advisors leverages our core research platform to provide differentiated services including investor relations and strategic consulting. Edison is authorised and regulated by the Financial Conduct Authority (Financial Conduct Authority). Edison Investment Research (NZ) Limited (Edison NZ) is the New Zealand subsidiary of Edison. Edison NZ is registered on the New Zealand Financial Service Providers Register (FSP number 247505) and is registered to provide wholesale and/or generic financial adviser services only. Edison Investment Research Inc (Edison US) is the US subsidiary of Edison and is regulated by the Securities and Exchange Commission. Edison Investment Research Limited (Edison Aus) [46085869] is the Australian subsidiary of Edison and is not regulated by the Australian Securities and Investment Commission. Edison Germany is a branch entity of Edison Investment Research Limited [4794244]. www.edisongroup.com

DISCLAIMER
Copyright 2017 Edison Investment Research Limited. All rights reserved. This report has been commissioned by Martin Currie Asia Unconstrained Trust and prepared and issued by Edison for publication globally. All information used in the publication of this report has been compiled from publicly available sources that are believed to be reliable; however we do not guarantee the accuracy or completeness of this report. Opinions contained in this report represent those of the research department of Edison at the time of publication. The securities described in the Investment Research may not be eligible for sale in all jurisdictions or to certain categories of investors. This research is issued in Australia by Edison Investments Pty Ltd (Corporate Authorised Representative (ACH 161 453 872) of Myonlineadvisers Pty Ltd (AFSL: 427484) and any access to it, is intended only for "wholesale clients" within the meaning of the Corporations Act 2001 of Australia. The Investment Research is distributed in the United States by Edison US to major US institutional investors only. Edison US is registered as an investment adviser with the Securities and Exchange Commission. Edison US relies upon the "publishers' exclusion" from the definition of investment adviser under Section 202(a)(11) of the Investment Advisers Act of 1940 and corresponding state securities laws. As such, Edison does not offer or provide personalised advice. We publish information about companies in which we believe our readers may be interested and this information reflects our sincere opinions. The information that we provide or that is derived from our website is not intended to be, and should not be construed in any manner whatsoever as, personalised advice. Also, our website and the information provided by us should not be construed by any subscriber or prospective subscriber as Edison’s solicitation to effect, or attempt to effect, any transaction in a security. The research in this document is intended for New Zealand resident professional financial advisers or brokers (for use in their roles as financial advisers or brokers) and habitual investors who are “wholesale clients” for the purpose of the Financial Advisers Act 2008 (FAA) (as described in sections 5(c) (1)(a), (b) and (c) of the FAA). This is not a solicitation or inducement to buy, sell, subscribe, or underwrite any securities mentioned or in the topic of this document. This document is provided for information purposes only and should not be construed as an offer or solicitation for investment in any securities mentioned or in the topic of this document. A marketing communication under FCA rules, this document ha
s not been prepared in accordance with the legal requirements designed to promote the independence of investment research and is not subject to any prohibition on dealing ahead of the dissemination of investment research. Edison has a restrictive policy relating to personal dealing. Edison Group does not conduct any investment business and, accordingly, does not itself hold any positions in the securities mentioned in this report. However, the respective directors, officers, employees and contractors of Edison may have a position in any or related securities mentioned in this report. Edison or its affiliates may perform services or solicit business from any of the companies mentioned in this report. The value of securities mentioned in this report can fall as well as rise and are subject to large and sudden swings. In addition it may be difficult or not possible to buy, sell or obtain accurate information about the value of securities mentioned in this report. Past performance is not necessarily a guide to future performance. Forward-looking information or statements in this report contain information that is based on assumptions, forecasts of future results, estimates of amounts not yet determinable, and therefore involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of their subject matter to be materially different from current expectations. For the purpose of the FAA, the content of this report is of a general nature, is intended as a source of general information only and is not intended to constitute a recommendation or opinion in relation to acquiring or disposing (including refraining from acquiring or disposing) of securities. The distribution of this document is not a “personalised service” and, to the extent that it contains any financial advice, is intended only as a “class service” provided by Edison within the meaning of the FAA (ie without taking into account the particular financial situation or goals of any person). As such, it should not be relied upon in making an investment decision. To the maximum extent permitted by law, Edison, its affiliates and contractors, and their respective directors, officers and employees will not be liable for any loss or damage arising as a result of reliance being placed on any of the information contained in this report and do not guarantee the returns on investments in the products discussed in this publication. FTSE International Limited (“FTSE”) © FTSE 2017. “FTSE®” is a trade mark of the London Stock Exchange Group companies and is used by FTSE International Limited under license. All rights in the FTSE indices and/or FTSE ratings vest in FTSE and/or its licensors. Neither FTSE nor its licensors accept any liability for any errors or omissions in the FTSE indices and/or FTSE ratings or underlying data. No further distribution of FTSE Data is permitted without FTSE’s express written consent.

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

295 Madison Avenue, 18th Floor

10017, New York

US

Sydney +61 (0)2 8249 8342

Level 12, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

295 Madison Avenue, 18th Floor

10017, New York

US

Sydney +61 (0)2 8249 8342

Level 12, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

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