- Schroder AsiaPacific Fund posted a negative first-half performance that missed its benchmark, following a sharp drop in markets owing to the Covid-19 pandemic.

The company's net asset value total return for the six months through March was negative 10.8%, below benchmark of negative 9.3%.

Schroder AsiaPacific said that since the end of the period to 13 May, there has been a recovery in the NAV of 10.5%.

'In recent months, most of the portfolio holdings have faced severe dislocation in both their operations and demand for their products, and few have much visibility on when they will return to normal,' chairman Nicholas Smith said.

'There are, however, grounds for some optimism.'

'Asia was the first affected by the virus, and parts of the region are among the first to unwind the lockdowns.'

'Secondly, Asia has a history of reacting well to shocks: it is what strong competent governments and flexible corporate sectors do.'

'This may be why share prices have so far held up better than some Western markets.'

'Helped by sterling's fall, the company's share price as at 13 May 2020 is down just 5.4% since the end of the last financial year.'

'Full economic recovery is some time away however, and parts of the corporate sector will come out of this much changed.'

'The long trend of the West outsourcing its low-cost manufacturing to Asia was already under challenge, for example.'

'As your manager notes, recent events may also accelerate the move to e-commerce, flexible working patterns, digital working patterns, social media use and more factory automation.'

'Asia's future lies with higher value-added products and its own internal growth potential, and we want the portfolio to continue to invest in companies that benefit from these.'

'Markets will continue to be volatile as they react to Covid-19 developments, and there may be more bad news to come.'

'The company came out of both the 1997 - 98 Asian crisis and the 2008 - 09 global financial crisis strongly, and, in our 25th anniversary year, we want to repeat that.'

At 2:20pm: [LON:SDP] Schroder Asiapacific Fund PLC share price was +11.25p at 414.25p

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