SCOTTISH ORIENTAL SMALLER COMPANIES TRUS (LON:SST)

Incorporated in Scotland, Scottish Oriental Smaller Companies Trust plc is a UK-based investment company that invests primarily in the smaller Asian listed companies (including Indian Subcontinent but excluding Japan and Australasia) with market capitalisation under US$3,000 million at the time of investment to achieve long-term capital growth with capital preservation. The company invests across a wide range of sectors such as Consumer Staples, Consumer Discretionary, Materials, Industrials, Technology, Financials, Real Estate, Healthcare, Utilities and Communication Services. The company is the member of the Association of Investment companies. It invests across China, India, Pakistan, Singapore, Sri Lanka, Thailand, Hong Kong, Indonesia, Malaysia, Philippines, South Korea, Taiwan and Vietnam. With the approval of the Board the trust may invest in the countries of other parts of Asia. 

The company uses bottom-up approach to select the high-quality stocks for long term; its investment approach is to invest with return mind-set and is inherently conservative. Before investing in any shares the company meets the management of the companies in which it is investing, to identify the potential in the company. Further, it analyses the cultural, sectoral, political, and economic influence on the performance of the shares, its performance, the availability of attractively priced and its financial condition. Since 2003, the company compares its portfolio’s performance with its benchmark, the Morgan Stanley Capital International (MSCI) AC Asia (excluding Japan index).

The company has appointed First State Investment Management (UK) Limited as its investment manager since 20 March 1995 until 2 July 2014 when the company appointed First State Investment (UK) Limited as its Alternative Investment fund manager, it delegated its portfolio management services to First State Investment management (UK) Limited.

To diversify its portfolio across the range of sectors and economies and to maintain the risk the company follows investment policy which includes it may invest maximum of 20% of its net assets value in the companies with market capitalisation of between US$3,000 million and US$5,000 million at the time of investment. To enable the company to participate in new issues, it may invest in the companies which are not yet listed but will got listed soon, according to its investment manager.

To maximise the return on the portfolio, its director may decide to use long-term borrowing of maximum 50% of its net assets. It may invest maximum of 15% of its total assets in the securities of any one company at the time of investment and maximum of 15% of its total assets may be invested in other investment companies and trust. In the adverse market condition, it may invest in the debt instruments in any country or currency and equity related securities such as convertible bonds and Warrants. The majority of its assets in a portfolio are denominated in Asian currencies or US dollars and it reserves the right to undertake foreign exchange hedging of its portfolio.