AI assistant
FIDELITY ASIAN VALUES PLC Interim / Quarterly Report 2021
4757_rns_2021-05-11_fa99a297-28ac-4704-8e1d-6fd6986e522c.pdf
Interim / Quarterly Report
Open in viewerOpens in your device viewer
F Fidelity
INTERNATIONAL
A
FIDELITY ASIAN VALUES PLC
Half-Yearly Report for the six months ended 31 January 2021
Investment Objective and Overview
The Company's investment objective is to achieve capital growth principally from the stockmarkets of the Asian Region excluding Japan.
Fidelity Asian Values PLC provides shareholders with a differentiated equity exposure to Asian markets. The Portfolio Manager, Nitin Bajaj, achieves this differentiation by favouring undervalued small and medium-sized companies as this allows him to find mispriced businesses, the "winners of tomorrow", before they become well known. Nitin believes the current market environment offers an unprecedented opportunity to invest in high quality Asian smaller companies at attractive valuations. From an investment perspective, what we see today is a two-speed market notable for its polarity. Predicting the future continues to be difficult, but we remain encouraged by the extreme valuation differential between "growth" and "value" companies and the opportunities inherent in that.
Kate Bolsover, Chairman, Fidelity Asian Values PLC
Half-Yearly Report 2021 | Fidelity Asian Values PLC
Contents
Portfolio Manager's Half-Yearly Review
Read more page 04
Net Asset Value per Ordinary Share as at 31 January
Ordinary Share Price as at 31 January
Directors' Reports
At a Glance 02
Summary of Results 03
Portfolio Manager's Half-Yearly Review 04
Twenty Largest Holdings 07
Interim Management Report 10
Directors' Responsibility Statement 12
Financial Statements
Income Statement 14
Statement of Changes in Equity 16
Balance Sheet 18
Notes to the Financial Statements 19
Information for Shareholders
Shareholder Information 29
Directory 31
Data Protection 32
Glossary of Terms 33
Fidelity Asian Values PLC | Half-Yearly Report 2021
At a Glance
Six months ended 31 January 2021
Net Asset Value ("NAV") per Ordinary Share total return¹,²
+22.5%
(31 January 2020: -13.2%)
Ordinary Share Price total return¹,²
+27.7%
(31 January 2020: -15.0%)
Comparative Index¹,³
+20.0%
(31 January 2020: -3.6%)
Standardised Performance Total Return (%)¹
NAV per Ordinary Share
Ordinary Share Price
Comparative Index¹
1 year ended 31 January 2021
3 years ended 31 January 2021
5 years ended 31 January 2021
10 years ended 31 January 2021
Sources: Fidelity and Datastream.
Past performance is not a guide to future returns.
1 Includes reinvested income.
2 Alternative Performance Measures. See Glossary of Terms on page 33.
3 See Glossary of Terms on page 33.
Half-Yearly Report 2021 | Fidelity Asian Values PLC
Summary of Results
| Assets | 31 January 2021 | 31 July 2020 |
|---|---|---|
| Gross Asset Exposure^{1} | £321.0m | £276.6m |
| Total Shareholders’ Funds | £319.9m | £269.4m |
| NAV per Ordinary Share^{2} | 437.08p | 364.39p |
| Gearing^{2,3} | 0.4% | 2.7% |
| Ordinary Share Price and Discount Data | ||
| --- | --- | --- |
| Ordinary Share Price at the period end | 418.00p | 335.00p |
| Period high | 454.00p | 457.50p |
| Period low | 333.00p | 246.00p |
| Discount to NAV per Ordinary Share at period end^{2} | (4.4%) | (8.1%) |
| Premium period high | 0.5% | 5.3% |
| Discount period high | (11.6%) | (15.7%) |
| Results for the six months ended 31 January | 2021 | 2020 |
| Revenue Return per Ordinary Share^{2} | 2.57p | 2.75p |
| Capital Return/(Loss) per Ordinary Share^{2} | 78.21p | (61.15p) |
| Total Return/(Loss) per Ordinary Share^{2} | 80.78p | (58.40p) |
- The value of the portfolio exposed to market price movements.
- Alternative Performance Measures. See Glossary of Terms on page 33.
- Gross Asset Exposure less Total Shareholders' Funds expressed as a percentage of Total Shareholders' Funds.
Summary of the key aspects of the Investment Policy
- The Portfolio Manager invests in securities of companies which he considers to have fundamental value that has not been recognised by the market.
- The Company is not restricted in terms of size or industry of companies included in the portfolio and may invest in unlisted securities.
- The Company may also invest into other transferable securities, collective investment schemes, money market instruments, cash and deposits and is also able to use derivatives for efficient portfolio management and investment purposes.
- The Company operates a variable management fee arrangement which is calculated by reference to its Comparative Index.
Fidelity Asian Values PLC | Half-Yearly Report 2021
Portfolio Manager's Half-Yearly Review
Performance Review
Over the six month period ended 31 January 2021, the net asset value ("NAV") of Fidelity Asian Values PLC rose by 22.5% and the share price by 27.7%, compared with a 20.0% return of the Comparative Index. While these numbers are encouraging, longer-term performance is not as strong as I would have hoped for.
In Asia, there was an expectation that investors would rotate out of growth stocks and into value names in the last quarter of 2020 in the hope that value would benefit from an economic recovery. However, this trend has not played out to the extent we expected and stock selection was the key driver of the Company's relative performance.
I continue to believe that fundamental analysis and owning good businesses which are run by competent management teams at attractive prices leaving sufficient margin of safety is the most time-tested way to make money in the stock market. I remain committed to my investment process.
Company's NAV and Comparative Index returns (as at 31 January 2021)
| NAV total return (Cumulative) (%) | Comparative Index total return (%) | |
|---|---|---|
| Tenure (since 1 April 2015) | +61.5 | +79.2 |
| 5 Years | +74.7 | +115.2 |
| 3 Years | +11.9 | +24.0 |
| 1 Year | +17.6 | +27.8 |
| 6 Months | +22.5 | +20.0 |
Source: Fidelity International.
Key Contributors over six months (as at 31 January 2021)
| Order | Security | Average Active Weight (%) | Gain/Loss (%) | Contribution to Relative Returns (%) |
|---|---|---|---|---|
| Top 5 Contributors | ||||
| 1 | BFI Finance Indonesia | +1.0 | +13.1 | +0.9 |
| 2 | Shriram Transport Finance | +1.2 | +8.2 | +0.8 |
| 3 | Axis Bank | +2.4 | +4.9 | +0.7 |
| 4 | Redington India | +1.8 | +4.6 | +0.6 |
| 5 | Nickel Mines | +0.7 | +12.6 | +0.6 |
| Total | +3.6 |
Source: Fidelity International.
Half-Yearly Report 2021 | Fidelity Asian Values PLC
Key Detractors over six months (as at 31 January 2021)
| Order | Security | Average Active Weight (%) | Gain/Loss (%) | Contribution to Relative Returns (%) |
|---|---|---|---|---|
| Bottom 5 Detractors | ||||
| 1 | Chaowei Power | +1.4 | -2.2 | -0.8 |
| 2 | GCL Poly Energy | -0.2 | n/a* | -0.6 |
| 3 | Sinopec Kantons | +1.0 | -2.2 | -0.6 |
| 4 | China Overseas Land & Investment | +0.9 | -2.8 | -0.5 |
| 5 | Gold Road Resources | +0.8 | -3.0 | -0.5 |
| Total | -3.0 |
- Not held in the Company's portfolio.
Source: Fidelity International.
In the last six months, the holdings in BFI Finance Indonesia, Shriram Transport Finance, Axis Bank, Redington India and Nickel Mines performed well and helped the Company's performance relative to the Comparative Index. I continue to own these stocks for their longer-term growth prospects and attractive valuations.
Meanwhile, the main losses we suffered were from Chaowei Power, Sinopec Kantons, China Overseas Land & Investment and Gold Road Resources, which lagged the broader market. GCL Poly Energy, which was not held in the Company's portfolio, performed extremely well and its absence detracted somewhat from performance relative to the Comparative Index.
COVID-19
The COVID-19 pandemic has caused considerable suffering across the world.
To date, the economic impact has been cushioned somewhat by large scale government interventions in the Western world, which has led to robust demand for goods being exported from Asia. So far, Asian countries have weathered the pandemic better than the West, likely the result of their demographic profile, high compliance with government restrictions and the early use of technology in the detection of cases.
Consequently, in my opinion, Asian countries will exit the pandemic in much better economic health than the USA or Europe given that governments in Asia have generally refrained from large scale fiscal stimulus.
As vaccines are rolled out, we are probably 9 to 12 months away from returning to normal unless we see something dramatically change with the virus.
Investment Strategy
The last few months in the markets have been unprecedented, pivoting from crisis to euphoria as the world started to anticipate normalisation following the pandemic. This, in addition to record levels of margin lending participation and speculative activity, has resulted in a two-speed market where stocks can be found at both valuation extremes.
Despite a brief recovery, smaller value companies are now trading at a 61% discount to large cap growth companies. This compares to a 65% discount seen during the peak of the
Fidelity Asian Values PLC | Half-Yearly Report 2021
Portfolio Manager's Half-Yearly Review continued
Lower Price to Earnings Ratio vs. indices
Source: Fidelity International, FactSet, 31 January 2021. Index: MSCI AC Asia ex Japan Small-Cap Index.
Higher Return on Equity vs. indices
Price to Earnings (P/E) Ratio is a measure for valuing a company's share price versus its earnings. Price to Earnings based on FY1 estimates. Low P/E can indicate that a company may currently be undervalued. Price to Book (P/B) Ratio is a measure for valuing a company's share price versus its book value. Low P/B can indicate that a company may currently be undervalued.
tech bubble in 1999-2000, which was the height of the previous growth cycle. Similarly, smaller value companies are trading at a 48% discount to small cap growth companies.
As a fundamental investor, my primary anchor for valuing any business is earnings and cash flows. I feel the current trend of using revenues or non-GAAP measures to value companies will be a passing trend - this has happened in the past and I do not believe this time will be any different.
Despite the outsized performance of growth stocks, the most interesting fact for me is that over time, value companies, especially in Asia, grow earnings faster than growth companies. I believe value stocks not only offer a higher margin of safety, but they are also able to grow earnings faster. As a result, it has paid off to be invested in small-cap value stocks in the longer-term. They have outperformed growth companies by a significant margin over the last 20 years.
I am excited by our holdings today. We own a portfolio of businesses which are dominant in
their industries, earn good returns on capital and are available at attractive valuations.
- Price to Earnings: 10.7x versus 15.5x for the Comparative Index.
- Return on Equity at 15.5% versus 11.3% for the Comparative Index.
- Dividend yield at 2.9% versus 2.2% for the Comparative Index.
- Balance Sheets better than the Comparative Index.
My team and I are working harder than ever to find quality businesses and then test every assumption we are making about the company fundamentals going forward. A sound investment process, diligence, discipline and patience have always been - and will always be - important for success in investing.
Nitin Bajaj
Portfolio Manager
26 April 2021
Half-Yearly Report 2021 | Fidelity Asian Values PLC
Twenty Largest Holdings
as at 31 January 2021
The Gross Asset Exposures shown below measure exposure to market price movements as a result of owning shares and derivative instruments. The Balance Sheet Value is the actual value of the portfolio. Where a contract for difference ("CFD") is held, the Balance Sheet Value reflects the profit or loss on the contract since it was opened and is based on how much the share price of the underlying share has moved.
| Gross Asset Exposure | Balance Sheet Value | ||
|---|---|---|---|
| £'000 | %¹ | £'000 | |
| Long Exposures – shares unless otherwise stated | |||
| Axis Bank | |||
| Private sector bank | 10,092 | 3.2 | 10,092 |
| HDFC Bank | |||
| Private sector bank | 7,992 | 2.5 | 7,992 |
| Granules India | |||
| Pharmaceutical manufacturing company | 7,445 | 2.3 | 7,445 |
| China Yongda Automobiles Services Holdings (shares and long CFD) | |||
| Investment holding company engaged in the sale of passenger vehicles and provision of related services | 6,942 | 2.2 | 4,767 |
| Power Grid Corporation of India | |||
| Operator of the Indian national electricity grid | 6,038 | 1.9 | 6,038 |
| Arwana Citramulia | |||
| Ceramics manufacturer | 5,963 | 1.9 | 5,963 |
| Taiwan Semiconductor Manufacturing Company | |||
| Developer, manufacturer and distributor of semiconductor related products | 5,752 | 1.8 | 5,752 |
| Shriram Transport Finance | |||
| Provider of hire purchase and lease finance for medium and heavy commercial vehicles | 5,305 | 1.7 | 5,305 |
| Fufeng Group (shares and long CFD) | |||
| Bio-fermentation products manufacturer | 5,284 | 1.6 | 5,131 |
| Redington India | |||
| Distributor of information technology products, mobile handsets and accessories | 4,680 | 1.5 | 4,680 |
| SK Hynix | |||
| Memory semiconductor supplier of dynamic random-access memory chips and flash memory chips | 4,580 | 1.4 | 4,580 |
Fidelity Asian Values PLC | Half-Yearly Report 2021
Twenty Largest Holdings continued
as at 31 January 2021
| Gross Asset Exposure | Balance Sheet Value | ||
|---|---|---|---|
| £'000 | %¹ | ||
| Chaowei Power | |||
| Manufacturer and seller of lead-acid motive batteries | 4,247 | 1.3 | 4,247 |
| Hinduja Global Solutions | |||
| Provider of business process management services | 4,243 | 1.3 | 4,243 |
| China Foods | |||
| Processor and distributor of food and beverages | 4,205 | 1.3 | 4,205 |
| Xingda International Holdings | |||
| Manufacturer and producer of radical tire cords, bead wires and other wires | 4,178 | 1.3 | 4,178 |
| Powertech Technology | |||
| Provider of turnkey services for chip probing, packaging and testing | 4,074 | 1.3 | 4,074 |
| Taiwan Union Technology | |||
| Provider of professional support, value-added materials and advanced mass lamination service to the global electronics industry | 3,943 | 1.2 | 3,943 |
| Texwinca Holdings | |||
| Production and sales of dyed yarns and knitted fabrics | 3,763 | 1.2 | 3,763 |
| Japfa | |||
| Industrial agri-food company | 3,667 | 1.1 | 3,667 |
| Chow Sang Sang Holdings International (shares and long CFD) | |||
| Jewellery retailer | 3,662 | 1.1 | 3,394 |
| Twenty largest long exposures | 106,055 | 33.1 | 103,459 |
| Other long exposures | 203,375 | 63.6 | 183,331 |
| Other long exposures before futures and hedges (157 holdings) | 309,430 | 96.7 | 286,790 |
Half-Yearly Report 2021 | Fidelity Asian Values PLC
| Gross Asset Exposure | Balance Sheet Value | ||
|---|---|---|---|
| £'000 | %¹ | £'000 | |
| Add: long futures | |||
| MSCI All Countries Asia ex Japan Index Future March 2021 | 4,701 | 1.5 | 340 |
| Add: hedging exposures | |||
| Forward Currency Contracts | 3 | – | 3 |
| Total long exposures after the netting of hedges | 314,134 | 98.2 | 287,133 |
| Add: short exposures | |||
| Short CFDs (7 holdings) | 5,679 | 1.8 | (218) |
| Short Futures (1 holding) | 1,213 | 0.4 | 66 |
| Gross Asset Exposure² | 321,026 | 100.4 | |
| Portfolio Fair Value³ | 286,981 | ||
| Net current assets (excluding derivative assets and liabilities) | 32,915 | ||
| Total Shareholders’ Funds/Net Assets | 319,896 |
- Gross Asset Exposure is expressed as a percentage of Total Shareholders’ Funds.
- Gross Asset Exposure comprises market exposure to investments of £287,675,000 plus market exposure to derivative instruments of £33,351,000.
- Portfolio Fair Value comprises investments of £287,675,000 plus derivative assets of £633,000 less derivative liabilities of £1,327,000 (per the Balance Sheet on page 18).
Fidelity Asian Values PLC | Half-Yearly Report 2021
Interim Management Report
Board Changes
Following the announcement of the proposed merger on 1 March 2021 between Invesco Enhanced Income Limited (Chaired by Kate Bolsover) and City Merchants High Yield Trust Limited (Chaired by Timothy Scholefield), Timothy Scholefield stood down as the Senior Independent Director of Fidelity Asian Values PLC on 22 April 2021. He will not be standing for re-election at the Annual General Meeting later this year.
Clare Brady took over as Senior Independent Director from 22 April and Michael Warren succeeded Timothy Scholefield as Chairman of the Management Engagement Committee.
Discount Management and Share Repurchases
The Board operates an active discount management policy, the primary purpose of which is to reduce discount volatility. Repurchases of ordinary shares are made at the discretion of the Board and within guidelines set by it and in light of prevailing market conditions. Shares will only be repurchased when it results in an enhancement to the NAV of the ordinary shares. In order to assist in managing the discount, the Board has shareholder approval to hold in Treasury any ordinary shares repurchased by the Company, rather than cancelling them. Any shares held in Treasury would only be re-issued at NAV per share or at a premium to NAV per share.
There continues to be turmoil in the world's financial markets and at times the Company's discount has been volatile in reaction to such market conditions. The Board has therefore approved the repurchase of 742,273 ordinary shares for holding in Treasury in the six months to 31 January 2021. Since then and as at the date of this report, 10,955 further shares have been repurchased into Treasury.
Principal Risks and Uncertainties
The Board, with the assistance of the Alternative Investment Fund Manager (FIL Investment Services (UK) Limited/the "Manager"), has developed a risk matrix which, as part of the risk management and internal controls process, has identified the key risks and uncertainties faced by the Company. These principal risks and uncertainties fall to the following categories: market, economic and political risk; investment performance risk; key person risk; discount control risk; gearing risk; derivatives risk; currency risk; cybercrime risk and pandemic risk. Other risks facing the Company include tax and regulatory risks and operational (service providers) risks. Information on each of these risks can be found in the Strategic Report section of the Annual Report for the year ended 31 July 2020 which is published on the Company's pages of the Manager's website at www.fidelity.co.uk/asianvalues.
These principal risks and uncertainties have not materially changed during the six months to 31 January 2021, and are equally applicable to the remaining six months of the Company's financial year.
Coronavirus (COVID-19)
With the pandemic continuing to evolve and variants of COVID-19 appearing, it is evident that although COVID-19 is being tackled by the arrival of vaccines, risks remain. The risks are being kept under constant review by the Board and the Manager. Investors should be prepared for market fluctuations and remember that holding shares in the Company should be considered a long-term investment. These risks are somewhat mitigated by the investment trust structure of the Company which means that no forced sales will need to take place to deal with any redemptions. Therefore, investments in the Company's portfolio can be held over a longer time horizon.
Half-Yearly Report 2021 | Fidelity Asian Values PLC
The Manager carries on reviewing its business continuity plans and operational resilience strategies on an ongoing basis and continues to take all reasonable steps in meeting its regulatory obligations and to assess operational risks, the ability to continue operating and the steps it needs to take to serve and support its clients, including the Board. For example, to enhance its resilience and to look after the safety of employees, the Manager has mandated that all staff work from home and has implemented split team working for those whose work is deemed necessary to be carried out in an office. The Manager follows the self-isolation and lock-down arrangements on staff in line with Government recommendations and guidance.
Investment team key activities are performing well despite the operational challenges posed by portfolio managers, analysts and trading/support functions working from home or in split team arrangements.
The Company's other third party service providers have also implemented similar measures to ensure business disruption can be kept to a minimum.
Transactions with the Manager and Related Parties
The Manager has delegated the Company's portfolio management and company secretariat services to FIL Investments International. Transactions with the Manager and related party transactions with the Directors are disclosed in Note 12 to the Financial Statements on page 28.
Going Concern Statement
The Directors have considered the Company's investment objective, risk management policies, liquidity risk, credit risk, capital management policies and procedures, the nature of its portfolio (being mainly securities which are readily realisable) and its expenditure and cash flow projections and have concluded that the Company has adequate resources to continue in operational existence for the foreseeable future. Thus, they continue to adopt the going concern basis of accounting in preparing these Financial Statements.
This conclusion also takes into account the Board's assessment of the continuing risks arising from COVID-19 as set out above.
Continuation votes are held every five years and the next continuation vote will be put to shareholders at the Annual General Meeting later this year.
By Order of the Board.
FIL Investments International
26 April 2021
Fidelity Asian Values PLC | Half-Yearly Report 2021
Directors' Responsibility Statement
The Disclosure and Transparency Rules ("DTR") of the UK Listing Authority require the Directors to confirm their responsibilities in relation to the preparation and publication of the Interim Management Report and Financial Statements.
The Directors confirm to the best of their knowledge that:
a) the condensed set of Financial Statements contained within the Half-Yearly Report has been prepared in accordance with the Financial Reporting Council's Standard, FRS 104: Interim Financial Reporting; and
b) the Portfolio Manager's Half-Yearly Review and Interim Management Report on pages 4 to 11, includes a fair review of the information required by DTR 4.2.7R and 4.2.8R.
The Half-Yearly Report has not been audited or reviewed by the Company's Independent Auditor.
The Half-Yearly Report was approved by the Board on 26 April 2021 and the above responsibility statement was signed on its behalf by Kate Bolsover, Chairman.
Half-Yearly Report 2021 | Fidelity Asian Values PLC
[THIS PAGE INTENTIONALLY LEFT BLANK]
INFORMATION FOR SHAREHOLDERS
FINANCIAL STATEMENTS
DIRECTORS' REPORTS
Fidelity Asian Values PLC | Half-Yearly Report 2021
Income Statement
for the six months ended 31 January 2021
| Notes | six months ended 31 January 2021 unaudited | |||
|---|---|---|---|---|
| revenue £'000 | capital £'000 | total £'000 | ||
| Gains/(losses) on investments | - | 54,689 | 54,689 | |
| Gains on derivative instruments | - | 3,675 | 3,675 | |
| Income | 4 | 4,017 | - | 4,017 |
| Investment management fees | 5 | (1,052) | 292 | (760) |
| Other expenses | (389) | - | (389) | |
| Foreign exchange losses | - | (1,095) | (1,095) | |
| Net return/(loss) on ordinary activities before finance costs and taxation | 2,576 | 57,561 | 60,137 | |
| Finance costs | (143) | - | (143) | |
| Net return/(loss) on ordinary activities before taxation | 2,433 | 57,561 | 59,994 | |
| Taxation on return/(loss) on ordinary activities | 6 | (548) | (134) | (682) |
| Net return/(loss) on ordinary activities after taxation for the period | 1,885 | 57,427 | 59,312 | |
| Return/(loss) per ordinary share | 7 | 2.57p | 78.21p | 80.78p |
The Company does not have any other comprehensive income. Accordingly the net return/(loss) on ordinary activities after taxation for the period is also the total comprehensive income for the period and no separate Statement of Comprehensive Income has been presented.
The total column of this statement represents the Income Statement of the Company. The revenue and capital columns are supplementary and presented for information purposes as recommended by the Statement of Recommended Practice issued by the AIC.
No operations were acquired or discontinued in the period and all items in the above statement derive from continuing operations.
Half-Yearly Report 2021 | Fidelity Asian Values PLC
| six months ended 31 January 2020 | year ended 31 July 2020 | ||||
|---|---|---|---|---|---|
| unaudited | audited | ||||
| revenue | capital | total | revenue | capital | total |
| £'000 | £'000 | £'000 | £'000 | £'000 | £'000 |
| - | (46,281) | (46,281) | - | (66,743) | (66,743) |
| - | 1,786 | 1,786 | - | 6,285 | 6,285 |
| 4,206 | - | 4,206 | 10,602 | - | 10,602 |
| (1,063) | 55 | (1,008) | (1,967) | 312 | (1,655) |
| (440) | - | (440) | (797) | - | (797) |
| - | (528) | (528) | - | (1,532) | (1,532) |
| 2,703 | (44,968) | (42,265) | 7,838 | (61,678) | (53,840) |
| (358) | - | (358) | (686) | - | (686) |
| 2,345 | (44,968) | (42,623) | 7,152 | (61,678) | (54,526) |
| (324) | 8 | (316) | (731) | 7 | (724) |
| 2,021 | (44,960) | (42,939) | 6,421 | (61,671) | (55,250) |
| 2.75p | (61.15p) | (58.40p) | 8.64p | (82.95p) | (74.31p) |
Fidelity Asian Values PLC | Half-Yearly Report 2021
Statement of Changes in Equity
for the six months ended 31 January 2021
| Notes | share capital £'000 | share premium account £'000 | |
|---|---|---|---|
| Six months ended 31 January 2021 (unaudited) | |||
| Total shareholders' funds at 31 July 2020 | 18,895 | 50,501 | |
| Net return on ordinary activities after taxation for the period | - | - | |
| Repurchase of ordinary shares | 10 | - | - |
| Dividend paid to shareholders | 8 | - | - |
| Total shareholders' funds at 31 January 2021 | 18,895 | 50,501 |
Six months ended 31 January 2020 (unaudited)
| Total shareholders' funds at 31 July 2019 | 18,058 | 38,073 | |
|---|---|---|---|
| Net (loss)/return on ordinary activities after taxation for the period | - | - | |
| Issue of ordinary shares on the exercise of rights attached to subscription shares | 10 | 770 | 11,332 |
| Issue of new ordinary shares | 10 | 67 | 1,096 |
| Dividend paid to shareholders | 8 | - | - |
| Total shareholders' funds at 31 January 2020 | 18,895 | 50,501 |
Year ended 31 July 2020 (audited)
| Total shareholders' funds at 31 July 2019 | 18,058 | 38,073 | |
|---|---|---|---|
| Net (loss)/return on ordinary activities after taxation for the year | - | - | |
| Repurchase of ordinary shares | 10 | - | - |
| Issue of ordinary shares on the exercise of rights attached to subscription shares | 10 | 770 | 11,332 |
| Issue of new ordinary shares | 10 | 67 | 1,096 |
| Dividend paid to shareholders | 8 | - | - |
| Total shareholders' funds at 31 July 2020 | 18,895 | 50,501 |
Half-Yearly Report 2021 | Fidelity Asian Values PLC
| capital redemption reserve £'000 | other non-distributable reserve £'000 | other reserve £'000 | capital reserve £'000 | revenue reserve £'000 | total shareholders' funds £'000 |
|---|---|---|---|---|---|
| 3,197 | 7,367 | 3,379 | 176,283 | 9,778 | 269,400 |
| – | – | – | 57,427 | 1,885 | 59,312 |
| – | – | (2,575) | – | – | (2,575) |
| – | – | – | – | (6,241) | (6,241) |
| 3,197 | 7,367 | 804 | 233,710 | 5,422 | 319,896 |
| 3,197 | 7,367 | 8,613 | 237,954 | 9,737 | 322,999 |
| – | – | – | (44,960) | 2,021 | (42,939) |
| – | – | – | – | – | 12,102 |
| – | – | – | – | – | 1,163 |
| – | – | – | – | (6,380) | (6,380) |
| 3,197 | 7,367 | 8,613 | 192,994 | 5,378 | 286,945 |
| 3,197 | 7,367 | 8,613 | 237,954 | 9,737 | 322,999 |
| – | – | – | (61,671) | 6,421 | (55,250) |
| – | – | (5,234) | – | – | (5,234) |
| – | – | – | – | – | 12,102 |
| – | – | – | – | – | 1,163 |
| – | – | – | – | (6,380) | (6,380) |
| 3,197 | 7,367 | 3,379 | 176,283 | 9,778 | 269,400 |
INFORMATION FOR SHAREHOLDERS
DIRECTORS' REPORTS
FINANCIAL STATEMENTS
Fidelity Asian Values PLC | Half-Yearly Report 2021
Balance Sheet
as at 31 January 2021
Company number 3183919
| | Notes | 31.01.21
unaudited
£'000 | 31.07.20
audited
£'000 | 31.01.20
unaudited
£'000 |
| --- | --- | --- | --- | --- |
| Fixed assets | | | | |
| Investments | 9 | 287,675 | 241,271 | 272,307 |
| Current assets | | | | |
| Derivative instruments | 9 | 633 | 7,299 | 2,230 |
| Debtors | | 3,446 | 1,886 | 718 |
| Amounts held at futures clearing houses and brokers | | 1,113 | 1,115 | 1,670 |
| Cash at bank | | 30,161 | 21,262 | 13,286 |
| | | 35,353 | 31,562 | 17,904 |
| Current liabilities | | | | |
| Derivative instruments | 9 | (1,327) | (1,149) | (1,763) |
| Other creditors | | (1,805) | (2,284) | (1,503) |
| | | (3,132) | (3,433) | (3,266) |
| Net current assets | | 32,221 | 28,129 | 14,638 |
| Net assets | | 319,896 | 269,400 | 286,945 |
| Capital and reserves | | | | |
| Share capital | 10 | 18,895 | 18,895 | 18,895 |
| Share premium account | | 50,501 | 50,501 | 50,501 |
| Capital redemption reserve | | 3,197 | 3,197 | 3,197 |
| Other non-distributable reserve | | 7,367 | 7,367 | 7,367 |
| Other reserve | | 804 | 3,379 | 8,613 |
| Capital reserve | | 233,710 | 176,283 | 192,994 |
| Revenue reserve | | 5,422 | 9,778 | 5,378 |
| Total shareholders' funds | | 319,896 | 269,400 | 286,945 |
| Net asset value per ordinary share | 11 | 437.08p | 364.39p | 379.65p |
Half-Yearly Report 2021 | Fidelity Asian Values PLC
Notes to the Financial Statements
1 Principal Activity
Fidelity Asian Values PLC is an Investment Company incorporated in England and Wales with a premium listing on the London Stock Exchange. The Company's registration number is 3183919, and its registered office is Beech Gate, Millfield Lane, Lower Kingswood, Tadworth, Surrey, KT20 6RP. The Company has been approved by HM Revenue & Customs as an Investment Trust under Section 1158 of the Corporation Tax Act 2010 and intends to conduct its affairs so as to continue to be approved.
2 Publication of Non-statutory Accounts
The Financial Statements in this Half-Yearly Report have not been audited by the Company's Independent Auditor and do not constitute statutory accounts as defined in section 434 of the Companies Act 2006 (the "Act"). The financial information for the year ended 31 July 2020 is extracted from the latest published Financial Statements of the Company. Those Financial Statements were delivered to the Registrar of Companies and included the Independent Auditor's Report which was unqualified and did not contain a statement under either section 498(2) or 498(3) of the Act.
3 Accounting Policies
(i) Basis of Preparation
The Company prepares its Financial Statements on a going concern basis and in accordance with UK Generally Accepted Accounting Practice ("UK GAAP") and FRS 102: The Financial Reporting Standard applicable in the UK and Republic of Ireland, issued by the Financial Reporting Council. The Financial Statements are also prepared in accordance with the Statement of Recommended Practice: Financial Statements of Investment Trust Companies and Venture Capital Trusts ("SORP") issued by the Association of Investment Companies ("AIC") in October 2019. FRS 104: Interim Financial Reporting has also been applied in preparing this condensed set of Financial Statements. The accounting policies followed are consistent with those disclosed in the Company's Annual Report and Financial Statements for the year ended 31 July 2020.
(ii) Going Concern
The Directors have a reasonable expectation that the Company has adequate resources to continue in operational existence for the foreseeable future. Accordingly, the Directors consider it appropriate to adopt the going concern basis of accounting in preparing these Financial Statements. This conclusion also takes into account the Board's assessment of the continuing risks arising from COVID-19.
Fidelity Asian Values PLC | Half-Yearly Report 2021
Notes to the Financial Statements continued
4 Income
| six months ended 31.01.21 unaudited £'000 | six months ended 31.01.20 unaudited £'000 | year ended 31.07.20 audited £'000 | |
|---|---|---|---|
| Investment income | |||
| Overseas dividends | 3,382 | 3,889 | 9,817 |
| Overseas scrip dividends | 310 | 45 | 45 |
| 3,692 | 3,934 | 9,862 | |
| Derivative income | |||
| Dividends received on long CFDs | 320 | 143 | 536 |
| Interest received on CFDs | 5 | 97 | 154 |
| 325 | 240 | 690 | |
| Other interest | |||
| Interest received on collateral and deposits | - | 32 | 50 |
| Total income | 4,017 | 4,206 | 10,602 |
Special dividends of £3,676,000 have been recognised in capital (six months ended 31 January 2020 and year ended 31 July 2020: £nil).
Half-Yearly Report 2021 | Fidelity Asian Values PLC
5 Investment Management Fees
| six months ended 31.01.21 unaudited £'000 | six months ended 31.01.20 unaudited £'000 | year ended 31.07.20 audited £'000 | |
|---|---|---|---|
| Investment management fees - base (charged to revenue) | 1,052 | 1,063 | 1,967 |
| Investment management fees - variable (credited to capital) | (292) | (55) | (312) |
| 760 | 1,008 | 1,655 |
FIL Investment Services (UK) Limited is the Company's Alternative Investment Fund Manager and has delegated portfolio management to FIL Investments International ("FII"). Both companies are Fidelity group companies.
The Company charges base investment management fees at an annual rate of 0.70% of net assets. In addition, there is +/- 0.20% variation fee based on the Company's NAV per share performance relative to the Company's Comparative Index. Fees are payable monthly in arrears and are calculated on a daily basis.
6 Taxation on Return/(Loss) on Ordinary Activities
| six months ended 31.01.21 unaudited £'000 | six months ended 31.01.20 unaudited £'000 | year ended 31.07.20 audited £'000 | |
|---|---|---|---|
| Revenue - taxation on overseas dividends | 548 | 324 | 731 |
| Capital - Indian capital gains tax charged/ (credited) in the period | 134 | (8) | (7) |
| Total taxation charge for the period | 682 | 316 | 724 |
Fidelity Asian Values PLC | Half-Yearly Report 2021
Notes to the Financial Statements continued
7 Return/(Loss) per Ordinary Share
| six months ended 31.01.21 unaudited | six months ended 31.01.20 unaudited | year ended 31.07.20 audited | |
|---|---|---|---|
| Revenue return per ordinary share | 2.57p | 2.75p | 8.64p |
| Capital return/(loss) per ordinary share | 78.21p | (61.15p) | (82.95p) |
| Total return/(loss) per ordinary share | 80.78p | (58.40p) | (74.31p) |
The return/(loss) per ordinary share is based on the net return/(loss) on ordinary activities after taxation for the period divided by the weighted average number of ordinary shares in issue during the period, as shown below:
| £'000 | £'000 | £'000 | |
|---|---|---|---|
| Net revenue return on ordinary activities after taxation | 1,885 | 2,021 | 6,421 |
| Net capital return/(loss) on ordinary activities after taxation | 57,427 | (44,960) | (61,671) |
| Net total return/(loss) on ordinary activities after taxation | 59,312 | (42,939) | (55,250) |
| number | number | number | |
| --- | --- | --- | --- |
| Weighted average number of ordinary shares held outside of Treasury during the period | 73,428,741 | 73,529,470 | 74,348,836 |
Half-Yearly Report 2021 | Fidelity Asian Values PLC
8 Dividends Paid to Shareholders
| six months ended 31.01.21 unaudited £'000 | six months ended 31.01.20 unaudited £'000 | year ended 31.07.20 audited £'000 | |
|---|---|---|---|
| Dividend of 8.50 pence per ordinary share paid for the year ended 31 July 2020 | 6,241 | - | - |
| Dividend of 8.80 pence per ordinary share paid for the year ended 31 July 2019 | - | 6,380 | 6,380 |
| 6,241 | 6,380 | 6,380 |
No dividend has been declared in respect of the six months ended 31 January 2021.
9 Fair Value Hierarchy
The Company is required to disclose the fair value hierarchy that classifies its financial instruments measured at fair value at one of three levels, according to the relative reliability of the inputs used to estimate the fair values.
| Classification | Input |
|---|---|
| Level 1 | Valued using quoted prices in active markets for identical assets |
| Level 2 | Valued by reference to inputs other than quoted prices included in level 1 that are observable (i.e. developed using market data) for the asset or liability, either directly or indirectly |
| Level 3 | Valued by reference to valuation techniques using inputs that are not based on observable market data |
Fidelity Asian Values PLC | Half-Yearly Report 2021
Notes to the Financial Statements continued
9 Fair Value Hierarchy continued
Categorisation within the hierarchy has been determined on the basis of the lowest level input that is significant to the fair value measurement of the relevant asset. The table below sets out the Company's fair value hierarchy:
| 31 January 2021 (unaudited) | level 1
£'000 | level 2
£'000 | level 3
£'000 | total
£'000 |
| --- | --- | --- | --- | --- |
| Financial assets at fair value through profit or loss | | | | |
| Investments | 284,357 | 2,157 | 1,161 | 287,675 |
| Derivative instrument assets | 406 | 227 | - | 633 |
| | 284,763 | 2,384 | 1,161 | 288,308 |
| Financial liabilities at fair value through profit or loss | | | | |
| Derivative instrument liabilities | - | (1,327) | - | (1,327) |
| 31 July 2020 (audited) | level 1
£'000 | level 2
£'000 | level 3
£'000 | total
£'000 |
| --- | --- | --- | --- | --- |
| Financial assets at fair value through profit or loss | | | | |
| Investments | 238,836 | 2,096 | 339 | 241,271 |
| Derivative instrument assets | 487 | 6,812 | - | 7,299 |
| | 239,323 | 8,908 | 339 | 248,570 |
| Financial liabilities at fair value through profit or loss | | | | |
| Derivative instrument liabilities | - | (1,149) | - | (1,149) |
| 31 January 2020 (unaudited) | level 1
£'000 | level 2
£'000 | level 3
£'000 | total
£'000 |
| --- | --- | --- | --- | --- |
| Financial assets at fair value through profit or loss | | | | |
| Investments | 270,739 | 1,052 | 516 | 272,307 |
| Derivative instrument assets | - | 2,230 | - | 2,230 |
| | 270,739 | 3,282 | 516 | 274,537 |
| Financial liabilities at fair value through profit or loss | | | | |
| Derivative instrument liabilities | (511) | (1,252) | - | (1,763) |
Half-Yearly Report 2021 | Fidelity Asian Values PLC
10 Share Capital
| | 31 January 2021
unaudited | | 31 July 2020
audited | | 31 January 2020
unaudited | |
| --- | --- | --- | --- | --- | --- | --- |
| | number of
shares | £'000 | number of
shares | £'000 | number of
shares | £'000 |
| Issued, allotted and fully paid | | | | | | |
| Ordinary shares of 25 pence each held outside of Treasury | | | | | | |
| Beginning of the period | 73,932,107 | 18,483 | 72,233,453 | 18,058 | 72,233,453 | 18,058 |
| Ordinary shares issued on the exercise of rights | - | - | 3,081,455 | 770 | 3,081,455 | 770 |
| New ordinary shares issued | - | - | 265,981 | 67 | 265,981 | 67 |
| Ordinary shares repurchased into Treasury | (742,273) | (186) | (1,648,782) | (412) | - | - |
| End of the period | 73,189,834 | 18,297 | 73,932,107 | 18,483 | 75,580,889 | 18,895 |
| Ordinary shares of 25 pence each held in Treasury^{1} | | | | | |
| --- | --- | --- | --- | --- | --- |
| Beginning of the period | 1,648,782 | 412 | - | - | - |
| Ordinary shares repurchased into Treasury | 742,273 | 186 | 1,648,782 | 412 | - |
| End of the period | 2,391,055 | 598 | 1,648,782 | 412 | - |
1 Ordinary shares held in Treasury carry no rights to vote, to receive a dividend or to participate in a winding up of the Company.
Fidelity Asian Values PLC | Half-Yearly Report 2021
Notes to the Financial Statements continued
10 Share Capital continued
| | 31 January 2021
unaudited | | 31 July 2020
audited | | 31 January 2020
unaudited | |
| --- | --- | --- | --- | --- | --- | --- |
| | number of shares | £'000 | number of shares | £'000 | number of shares | £'000 |
| Issued, allotted and fully paid | | | | | | |
| Subscription shares of 0.001 pence | | | | | | |
| Beginning of the period | - | - | 11,103,030 | - | 11,103,030 | - |
| Cancellation of subscription shares on the exercise of rights | - | - | (3,081,455) | - | (3,081,455) | - |
| Cancellation of subscription shares | - | - | (8,021,575) | - | (8,021,575) | - |
| End of the period | - | - | - | - | - | - |
| Total share capital | 18,895 | | 18,895 | | 18,895 | |
The cost of ordinary shares repurchased into Treasury during the year was £2,575,000 (year ended 31 July 2020: £5,234,000 and six months ended 31 January 2020: £nil).
A bonus issue of subscription shares to ordinary shareholders on the basis of one subscription share for every five ordinary shares held took place on 5 December 2016. Each subscription share gives the holder the right, but not the obligation, to subscribe for one ordinary share upon payment of the subscription price. The subscription price is based on the published unaudited NAV per ordinary share at 2 December 2016, plus a premium depending upon the year in which the right is exercised. The subscription share rights can be exercised annually in the 25 business days prior to the relevant subscription date (on which the exercise would take effect). The subscription dates, subscription prices and premia are as follows:
| Subscription date | Subscription price | Premium | |
|---|---|---|---|
| First subscription date | 30 November 2017 | 370.75p | 1% |
| Second subscription date | 30 November 2018 | 381.75p | 4% |
| Final subscription date | 29 November 2019 | 392.75p | 7% |
Half-Yearly Report 2021 | Fidelity Asian Values PLC
After the final subscription date of 29 November 2019, the Company appointed a trustee to exercise any rights remaining that were not exercised by shareholders, providing that by doing so a profit could be realised. To realise a profit the sale proceeds from selling the resulting ordinary shares in the market would need to be in excess of the 392.75 pence per share price of exercising the rights, plus any related expenses and fees. On 13 December 2019, the Board of the Company announced the Trustee did not exercise any of the unexercised subscription rights of the 8,021,575 outstanding subscription shares. The Trustee determined the net proceeds of sale after deduction of all costs and expenses, would not have exceeded the costs of exercising the subscription share rights. Therefore, all subscription share rights for the outstanding subscription shares lapsed with nil value.
In the prior period, the Company issued 3,081,455 ordinary shares on the exercise of rights attached to subscription shares. The subscription share price of 392.75 pence per ordinary share issued represented a premium of 367.75 pence per share over the 25 pence nominal value of each share. The total premium received on the issue of ordinary shares of £11,332,000 was credited to the share premium account.
The Company issued no new ordinary shares during the period (year ended 31 July 2020 and six months ended 31 January 2020: 265,981 shares). In the prior period, the total premium received on the issue of new ordinary shares of £1,096,000 was credited to the share premium account.
11 Net Asset Value per Ordinary Share
| | 31.01.21
unaudited | 31.07.20
audited | 31.01.20
unaudited |
| --- | --- | --- | --- |
| Total shareholders’ funds | £319,896,000 | £269,400,000 | £286,945,000 |
| Ordinary shares held outside of Treasury at
period end | 73,189,834 | 73,932,107 | 75,580,889 |
| Net asset value per ordinary share | 437.08p | 364.39p | 379.65p |
It is the Company's policy that shares held in Treasury will only be reissued at net asset value per ordinary share or at a premium to net asset value per ordinary share and, therefore, shares held in Treasury have no dilutive effect.
Fidelity Asian Values PLC | Half-Yearly Report 2021
Notes to the Financial Statements continued
12 Transactions with the Manager and Related Parties
FIL Investment Services (UK) Limited is the Company's Alternative Investment Fund Manager and has delegated portfolio management and the role of Company Secretary to FIL Investments International ("FII"). Both companies are Fidelity group companies.
Details of the fee arrangements are given in Note 5 above. During the period, management fees of £760,000 (six months ended 31 January 2020: £1,008,000 and year ended 31 July 2020: £1,655,000) and secretarial and administration fees of £38,000 (six months ended 31 January 2020: £38,000 and year ended 31 July 2020: £75,000) were payable to FII. At the Balance Sheet date, management fees of £143,000 (31 January 2020: £130,000 and 31 July 2020: £117,000) and secretarial and administration fees of £6,000 (31 January 2020: £6,000 and 31 July 2020: £6,000) were accrued and included in other creditors. FII also provides the Company with marketing services. The total amount payable for these services during the period was £66,000 (six months ended 31 January 2020: £64,000 and year ended 31 July 2020: £118,000). At the Balance Sheet date, marketing services of £13,000 (31 January 2020: £24,000 and 31 July 2020: £25,000) were accrued and included in other creditors.
As at 31 January 2021, the Board consisted of five non-executive Directors (as shown in the Directory on page 31), all of whom are considered to be independent by the Board. None of the Directors have a service contract with the Company. The Chairman receives an annual fee of £36,000, the Audit Committee Chairman an annual fee of £30,000 and each other Director an annual fee of £26,000. The following members of the Board held shares in the Company: Kate Bolsover 15,452 ordinary shares, Clare Brady 2,500 ordinary shares, Timothy Scholefield 12,000 ordinary shares, Grahame Stott 25,000 ordinary shares and Michael Warren 10,000 ordinary shares.
Half-Yearly Report 2021 | Fidelity Asian Values PLC
Shareholder Information
Investing in Fidelity Asian Values PLC
Fidelity Asian Values PLC is a company listed on the London Stock Exchange and you can buy its shares through a platform, stockbroker, share shop or bank. Fidelity also offers a range of options, so that you may invest in a way that is best for you. Details of how to invest and the latest Key Information Document can be found on Fidelity's website at www.fidelity.co.uk/asianvalues
CONTACT INFORMATION
Shareholders and Fidelity Platform Investors should contact the appropriate administrator using the contact details given below and in the next column. Links to the websites of major platforms can be found online at www.fidelityinvestmenttrusts.com
Shareholders on the main share register
Contact Link Group, Registrar to Fidelity Asian Values PLC, 10th Floor, Central Square, 29 Wellington Street, Leeds LS1 4DL.
Email: [email protected]
Telephone: 0371 664 0300 (calls are charged at the standard geographic rate and will vary by provider. Calls outside the United Kingdom will be charged at the applicable international rate. Lines are open 9:00 - 17:30, Monday to Friday, excluding public holidays in England and Wales).
Details of individual shareholdings and other information can also be obtained online from the Registrar's Share Portal at www.signalshares.com. Shareholders are able to manage their shareholding online by registering for the Share Portal, a free and secure online access service. Facilities include:
Account Enquiry - Shareholders can access their personal shareholding, including share transaction history, dividend payment history and obtain an up-to-date shareholding valuation.
Amendment of Standing Data - Shareholders can change their registered postal address and add, change or delete dividend mandate instructions. Shareholders can also download forms such as change of address, stock transfer and dividend mandate forms as well as buy and sell shares in the Company.
Should you have any queries in respect of the Link Share Portal, contact the helpline on 0371 664 0391 (calls are charged at the standard geographic rate and will vary by provider. Calls outside the United Kingdom will be charged at the applicable international rate. Lines are open 9:00 - 17:30, Monday to Friday excluding public holidays in England and Wales).
Link Share Dealing Service
Link Group offer a low cost share dealing service to buy or sell shares. Further information is available at www.linkshareddeal.com, or by telephoning 0371 664 0445 (calls are charged at the standard geographic rate and will vary by provider. Calls outside the United Kingdom will be charged at the applicable international rate. Lines are open 8:00 - 16:30, Monday to Friday excluding public holidays in England and Wales). The Link Share Dealing Service allows you to deal in the shares of other companies for which Link Group acts as Registrar, provided you are already a shareholder in the relevant company, and that company offers the Share Deal facility to its shareholders.
Fidelity Asian Values PLC | Half-Yearly Report 2021
Shareholder Information continued
Fidelity Platform Investors
Contact Fidelity, using the freephone numbers given below, or in writing to: UK Customer Service, Fidelity, PO Box 391, Tadworth KT20 9FU.
Website: www.fidelity.co.uk/its
Private investors: call free on 0800 41 41 10, 9:00 - 18:00 Monday to Saturday.
Financial advisers: call free on 0800 41 41 81, 8:00 - 18:00, Monday to Friday.
General enquiries
General enquiries should be made to the Secretary, at the Company's registered office: FIL Investments International, Investment Trusts, Beech Gate, Millfield Lane, Lower Kingswood, Tadworth, Surrey KT20 6RP.
Telephone: 01737 837846
Email: [email protected]
Website: www.fidelityinvestmenttrusts.com
If you hold Fidelity Asian Values PLC shares in an account provided by Fidelity International, you will receive a report every six months detailing all of your transactions and the value of your shares.
| Financial Calendar 2021 | |
|---|---|
| 31 January 2021 | Half-Yearly Period End |
| 27 April 2021 | Announcement of the Half-Yearly Results |
| May 2021 | Publication of the Half-Yearly Report |
| 31 July 2021 | Financial Year End |
| October 2021 | Publication of the Annual Report |
| December 2021 | Annual General Meeting |
Half-Yearly Report 2021 | Fidelity Asian Values PLC
Directory
Board of Directors
Kate Bolsover (Chairman)
Clare Brady (Senior Independent Director)
Timothy Scholefield
Grahame Stott (Chairman of the Audit Committee)
Michael Warren
Alternative Investment Fund Manager (AIFM/the Manager)
FIL Investment Services (UK) Limited
Beech Gate
Millfield Lane
Lower Kingswood
Tadworth
Surrey
KT20 6RP
Investment Manager, Secretary and Registered Office
FIL Investments International
Beech Gate
Millfield Lane
Lower Kingswood
Tadworth
Surrey
KT20 6RP
Email: [email protected]
Banker and Custodian
JPMorgan Chase Bank (London Branch)
125 London Wall
London
EC2Y 5AJ
Depositary
J.P. Morgan Europe Limited
25 Bank Street
London
E14 5JP
Financial Adviser and Stockbroker
Stifel Nicolaus Europe Ltd
150 Cheapside
London
EC2V 6ET
Independent Auditor
Ernst & Young LLP
25 Churchill Place
London
E14 5EY
Lawyer
Charles Russell Speechlys LLP
5 Fleet Place
London
EC4M 7RD
Registrar
Link Group
10th Floor
Central Square
29 Wellington Street
Leeds
LS1 4DL
Fidelity Asian Values PLC | Half-Yearly Report 2021
Data Protection
General Data Protection Regulation ("GDPR")
What personal data is collected and how is it used
The Company is an investment trust which is a public limited company and has certain regulatory obligations such as the requirement to send documents to its shareholders, for example, the Annual Report and other documents that relate to meetings of the Company. The Company will therefore collect shareholders' personal data such as names, addresses and identification numbers or investor codes and will use this personal data to fulfil its statutory obligations.
Any personal data collected will be kept securely on computer systems and in some circumstances on paper. Personal information is kept secure in line with Fidelity's Information Security policies and standards. If you are unhappy with how we have used your personal data, you can complain by contacting the UK Data Protection Officer, Fidelity International, Beech Gate, Millfield Lane, Lower Kingswood, Tadworth, Surrey KT20 6RP.
Sharing personal data
In order to assist the Company in meeting its statutory requirements, the Company delegates certain duties around the processing of this data to its third party service providers, such as the Company's Registrar and Printers. The Company has appointed Fidelity to undertake marketing activities for the Company and their privacy statement can be found on the Company's website at https://investment-trusts.fidelity.co.uk/privacy-policy/
The Company's agreements with the third party service providers have been updated to be compliant with GDPR requirements. The Company confirms to its shareholders that their data will not be shared with any third party for any other purpose, such as for marketing purposes. In some circumstances, it may be necessary to transfer shareholders' personal data across national borders to Fidelity Group entities operating in the European Economic Area ("EEA"). Where this does occur, the European standard of protections will be applied to the personal data that is processed. Where personal data is transferred within the Fidelity group, but outside of the EEA, that data will subsequently receive the same degree of protection as it would in the EEA.
How long will personal data be kept for?
We will keep the personal data for as long as is necessary for these purposes and no longer than we are legally permitted to do so.
Requesting access, making changes to your personal data and other important information
Shareholders can access the information that the Company holds about them or ask for it to be corrected or deleted by contacting Fidelity's UK Data Protection Officer, Fidelity International, Beech Gate, Millfield Lane, Lower Kingswood, Tadworth, Surrey KT20 6RP.
Half-Yearly Report 2021 | Fidelity Asian Values PLC
Glossary of Terms
AIF
Alternative Investment Fund ("AIF"). The Company is an AIF.
AIFM
Alternative Investment Fund Manager ("AIFM"). The Board has appointed FIL Investment Services (UK) Limited to act as the Company's AIFM (the Manager).
AIFMD
The Alternative Investment Fund Managers Directive ("AIFMD") is a European Union Directive and was implemented on 22 July 2014.
Alternative Performance Measures
The Company uses the following Alternative Performance Measures which are all defined in this Glossary of Terms:
- Discount/Premium;
- Gearing;
- Net Asset Value (NAV) per Ordinary Share;
- Ongoing Charges;
- Revenue, Capital and Total Returns; and
- Total Return Performance.
Collateral
Assets provided as security.
Comparative Index
The MSCI All Countries Asia ex Japan Small Cap Index (net) total return (in Sterling terms) since 1 February 2020. Prior to that date and since 1 August 2015, it was the MSCI All Countries Asia ex Japan Index (net) total return (in Sterling terms). Before 1 August 2015, it was the MSCI All Countries Far East ex Japan Index (net) (in Sterling terms).
Contract for Difference (CFD)
A contract for difference is a derivative. It is a contract between the Company and an investment house at the end of which the parties exchange the difference between the opening price and the closing price of an underlying asset of the specified financial instrument. It does not involve the Company buying or selling the underlying asset, only agreeing to receive or pay the movement in its share price. A contract for difference allows the Company to gain access to the movement in the share price by depositing a small amount of cash known as margin. The Company may reason that the asset price will rise, by buying ("long" position) or fall, by selling ("short" position). If the Company trades long, dividends are received and interest is paid. If the Company trades short, dividends are paid and interest is received.
Custodian
An entity that holds (as intermediary) the Company's assets, arranges the settlement of transactions and administers income, proxy voting and corporate actions. The Company's Custodian is JPMorgan Chase Bank.
Depositary
An entity that oversees the custody, cash arrangements and other AIFM responsibilities of the Company. J.P. Morgan Europe act as the Company's Depositary.
Derivatives
Financial instruments (such as futures, options and contracts for difference) whose value is derived from the value of an underlying asset.
Fidelity Asian Values PLC | Half-Yearly Report 2021
Glossary of Terms continued
Discount
If the share price of the Company is lower than the net asset value per ordinary share, the Company's shares are said to be trading at a discount. It is shown as a percentage of the net asset value per ordinary share.
Fair Value
The fair value is the best measure of the realisable value of the investments, including derivatives, at a point in time and this is measured as:
- Listed investments – valued at bid prices or last market prices, as available, otherwise at published price quotations;
- Unlisted investments – valued using an appropriate valuation technique in the absence of an active market;
- Contracts for difference – valued as the difference between the settlement price of the contract and the underlying shares in the contract (unrealised gains or losses);
- Futures and options – valued at the quoted trade price for the contract; and
- Forward currency contracts – valued at the appropriate quoted forward foreign exchange rate ruling at the Balance Sheet date.
Forward Currency Contract
Agreement to buy or sell a currency at a specified future date and at a pre-agreed price.
Futures
Agreements to buy or sell a stated amount of a security at a specific future date and at a pre-agreed price.
Gearing
Gearing describes the level of the Company's exposure and is expressed as a percentage of shareholders' funds. It reflects the amount of exposure the Company uses to invest in the market. It can be obtained through the use of bank loans, bank overdrafts and derivatives, in order to increase the Company's exposure to investments. If assets rise in value, gearing magnifies the return to shareholders. Correspondingly, if assets fall in value, gearing magnifies the fall. Derivatives are used as a way of gaining exposure to the price movements of shares without buying the underlying shares directly.
Gearing Percentage
In a simple example, if a company has £100 million of net assets and a total portfolio of £108 million, with £8 million of borrowings (either via bank loans or derivatives), then the shareholders' funds are 8% geared. Normally, the higher the gearing percentage, the more sensitive the Company's shares will be to the movements up and down in the value of the investment portfolio.
Gross Asset Exposure
A measure of the Company's total equity exposure. It is calculated as the sum of all long exposures, after taking account of hedging positions and the absolute value of all short exposures.
Hedging
A strategy aimed at minimising or eliminating the risk or loss through adverse movements normally involving taking a position in a derivative such as future or option.
Half-Yearly Report 2021 | Fidelity Asian Values PLC
Manager
FIL Investment Services (UK) Limited is the appointed Manager under the Alternative Investment Fund Managers' Directive ("AIFMD") and it has delegated the portfolio management of assets to FIL Investments International.
Net Asset Value (NAV)
Net asset value is sometimes also described as "shareholders' funds" and represents the total value of the Company's assets less the total value of its liabilities. For valuation purposes it is common to express the net asset value on a per ordinary share basis.
Net Asset Value per Ordinary Share
The net asset value divided by the number of ordinary shares in issue.
Net Market Exposure
A measure of the Company's net equity exposure. It is calculated as the total of all long exposures (less the total of any exposures hedging the portfolio) less the total of all short exposures.
Ongoing Charges (excluding variable management fee element)
Total operational expenses (excluding finance costs and taxation) incurred by the Company as a percentage of the average daily net asset values.
Options
An option is a contract which gives the right but not the obligation to buy or sell an underlying asset at an agreed price on or before an agreed date. Options may be calls (buy) or puts (sell) and are used to gain or reduce exposure to the underlying asset on a conditional basis.
Portfolio Manager
Nitin Bajaj is the appointed Portfolio Manager for the Company and is responsible for managing the Company's assets.
Premium
If the share price of the Company is higher than the net asset value per ordinary share, the Company is said to be trading at a premium. The premium is shown as a percentage of the net asset value per ordinary share.
Registrar
An entity that manages the Company's shareholders register. The Company's Registrar is Link Group.
Reserves
- Share premium account represents the amount by which the proceeds from the issue of new ordinary shares or the issue of ordinary shares on the exercise of rights attached to subscription shares, exceeded the nominal value of those ordinary shares. It is not distributable by way of dividend and cannot be used to fund share repurchases.
- Capital redemption reserve maintains the equity share capital of the Company and represents the nominal value of shares repurchased and cancelled. It is not distributable by way of dividend and cannot be used to fund share repurchases.
- Other non-distributable reserve represents amounts transferred from the warrant reserve in prior years with High Court approval. It is not distributable by way of dividend and cannot be used to fund share repurchases.
Fidelity Asian Values PLC | Half-Yearly Report 2021
Glossary of Terms continued
- Other reserve represents amounts transferred from the share premium account and the capital redemption reserve in prior years with High Court approval. It is not distributable by way of dividend. It can be used to fund share repurchases.
- Capital reserve represents realised gains and losses on investments and derivatives sold, unrealised increases and decreases in the fair value of investments and derivatives held and other income and costs recognised in the capital column of the Income Statement. It is distributable by way of dividend and can be used to fund share repurchases.
- Revenue reserve represents retained revenue surpluses recognised in the revenue column of the Income Statement. It is distributable by way of dividend.
Return/(Loss)
The return/(loss) generated in the period from the investments:
- Revenue return – reflects the dividends and interest from investments and other income net of expenses, finance costs and taxation;
- Capital return – reflects the return on capital, excluding any revenue return; and
- Total return – reflects the aggregate of revenue and capital return.
Shareholders' Funds
Shareholders' funds are also described as net asset value and represent the total value of the Company's assets less the total value of its liabilities as shown in the Balance Sheet.
Total Return Performance
The return on the share price or net asset value per ordinary share taking into account the rise and fall of share prices and dividends paid to shareholders. Any dividends received by the shareholder are assumed to have been reinvested in additional shares (for share price total return) or the Company's assets (for net asset value total return).
Treasury Shares
Ordinary shares of the Company that have been repurchased by the Company and not cancelled but held in Treasury. These shares do not receive dividends, have no voting rights and are excluded from the net asset value per ordinary share calculation.
To find out more about Fidelity Asian Values PLC visit our website www.fidelity.co.uk/asianvalues where you can read articles and watch videos on the Company.
www.fidelityinvestmenttrusts.com
Fidelity, Fidelity International, the Fidelity International logo and F symbol are trademarks of FIL Limited
Printed by Park Communications on FSC® certified paper.
Park works to the EMAS standard and its Environmental Management System is certified to ISO 14001.
This publication has been manufactured using 100% offshore wind electricity sourced from UK wind.
100% of the inks used are vegetable oil based, 95% of press chemicals are recycled for further use and, on average 99% of any waste associated with this production will be recycled and the remaining 1% used to generate energy.
This document is printed on Revive Silk paper containing 100% recycled fibre. The FSC® label on this product ensures responsible use of the world's forest resources.