Investment trust Aberdeen Asia Focus (LON:AAS) beat its benchmark by 29.4% over the five years to 31 July 2026. As a result, the Asian small caps-focused fund passed a performance test that would otherwise have triggered a tender offer.
A tender offer is a formal proposal by an investment trust to buy back a specific percentage of its own shares from shareholders at a set price, usually close to net asset value (NAV). It provides an exit route for investors when poor performance persists or the shares trade at a wide NAV discount.
Aberdeen Asia Focus uncovers hidden gems
Aberdeen Asia Focus offers investors access to a diversified portfolio of market-leading but relatively smaller Asian businesses.
Krishna Shanmuganathan, chair, says these companies are often overlooked by passive funds. And they are hand-picked through a rigorous bottom-up stock selection process.
| One-year SPTR (%) | Five-year SPTR (%) | 10-year SPTR (%) | |
| Aberdeen Asia Focus | 30.86 | 84.09 | 198.7 |
| Fidelity Asian Values | 12.63 | 42.52 | 141.91 |
| Scottish Oriental Smaller Companies | -8.45 | 32.53 | 73.33 |
Source: The AIC/Morningstar
‘Since these businesses are often under-researched by the wider market and attractively priced, our manager, supported by a team of 36 investment professionals focussed on Asian equities and based throughout Asia, is able to uncover hidden gems,’ enthuses Shanmuganathan.
‘These are the next generation of market leaders capitalising on accelerating structural growth trends in their economies, which are themselves growing at pace.’
Passing the test with flying colours
In August 2021, the board at Aberdeen Asia Focus introduced a performance-linked conditional tender test as part of its commitment to discount control and delivering shareholder value.
However, since the fund’s performance significantly exceed the MSCI AC Asia ex Japan Small Cap Index over the five year period, no tender offer is required.
Aberdeen Asia Focus generated a NAV total return of 67.2%. That was comfortably more than the 37.8% delivered by the index. But Aberdeen Asia Focus isn’t resting on its laurels.
A new five-year performance test period began on 1 August. As before, if the trust fails to at least match the benchmark, the board will put forward proposals for a 25% tender offer at a price close to NAV.
Aberdeen Asia Focus has handily beaten its benchmark over five years. And yet the trust currently trades at a 9.2% discount to NAV. This rating shows that performance-related tenders are no silver bullet for bringing in discounts.
But it does present a buying opportunity for investors keen to harness the growth of some of Asia’s best growth businesses.
Manager Gabriel Sacks and co-manager Xin-Yao Ng pursue a bottom-up, stock selection driven approach to identifying the best quality smaller companies from across Asia. They are aided by Aberdeen’s sizeable on-the-ground presence, which helps them identify undiscovered opportunities.
The process is clearly working. Aberdeen Asia Focus is the best one, five and 10-year share price total return performer in the Association of Investment Companies’ Asia Pacific Smaller Companies sector.
And the fund is also an ‘ISA millionaire’ investment trust. This means the company would have returned more than £1 million for ISA savers who invested their entire allowance every year from 1999 to 2025. In fact, Aberdeen Asia Focus would have accumulated a tax-free pot of over £2 million.
