Although Henderson Asian Growth Trust invests across Asia, it also suits investors looking for significant exposure to China but in a well diversified, focused portfolio of companies. Investors should be prepared to accept some short term volatility in return for the exciting long term growth of a region set to be the world leader in economic growth.

The Trust seeks a high rate of total return from companies operating primarily in the Pacific region including India, but excluding Japan and Australasia.

• The Fund Manager employs a concentrated portfolio and is looking to find the 40-60 best stock ideas in the region.
• The portfolio is constructed primarily on a stock picking basis and all other characteristics, such as geographic and sector breakdown come as a consequence of stocks selected.
• The Trust delivers diversified exposure to some of the fastest growing economies in the region including China, Hong Kong, Taiwan, India, South Korea, Singapore, Indonesia and Vietnam.

• Most of the investments in this portfolio are not made in Sterling, so exchange rates could affect the value of and income from your investment.
• Asian focused portfolios are exposed to Emerging Markets which tend to be less stable than more established markets and can be affected by local political and economic conditions, reliability of trading systems, buying and selling practices and financial reporting standards.
• This portfolio may hold 40-60 stocks. If one of these investments declines in value, this can reduce the portfolio's value more than if it held a larger number of investments. Full details of risks.

Markets were broadly flat in April as economic data from both Asia as well as the US and Europe was fairly mixed. Many Asian companies reported their most recent quarterly earnings during the month and on balance, there were more negative than positive surprises. Chinese shares outperformed as markets anticipated further policy easing by the government.

Performance was robust over the month with notable contributions from Hyundai Motors in Korea, which rallied after reporting firm revenues and earnings for the final quarter of 2011, and CP ALL (convenience stores) in Thailand, which is continuing to benefit from a recovery in retail sales following last year’s floods. Agile Properties was also strong as transaction volumes in China showed early signs of improving. Chinese shares Tencent and Zhuzhou CSR Times Electric were also noteworthy performers. The main laggards were HTC and Foxconn Technology in Taiwan, which were hurt by news that Samsung continues to gain market share in the global smartphone market.

A position was added in SK Innovation in Korea in anticipation of strong growth in the company’s petrochemical and refinery businesses. The purchase was financed through trimming positions in Samsung Electronics and Tencent.

We expect to see Asian economies picking up over the remainder of the year in response to steady policy easing by central banks and more proactive fiscal measures from governments across the region. Company earnings forecasts are starting to rise in response to increasing optimism about the economic outlook and this should support stock market returns over the rest of the year – provided that problems in the Eurozone remain contained and the US economy stays on track.

Andrew Beal
April 2012