Schroder Oriental Income Fund Limited
Half Year Report for the six months ended 28 February 2026
Schroder Oriental Income Fund Limited (the “Company”) hereby submits its Half Year Report for the six months ended 28 February 2026 as required by the Financial Conduct Authority’s Disclosure Guidance and Transparency Rule 4.2.
Nick Winsor, Chair of the Company, commented: “Performance was strong in both absolute and relative terms, led by effective stock selection across several Asia-Pacific markets – particularly within technology, resources and selected financials. The Board remains convinced that the Portfolio Manager’s focus on quality companies with attractive dividend prospects and potential for capital growth over the long term remains the best way to navigate current market volatility.”
Key highlights
- During the period under review, the Company delivered a NAV per share total return of +35.3%, outperforming the Reference Index (MSCI AC Pacific ex Japan Index, sterling terms) by 4.6 percentage points. The share price total return for the six months to 28 February 2026 was +38.1%.
- The Company has increased its dividend every year since launch and is recognised as part of the AIC’s “next generation” dividend heroes. The Board continues to target full dividend hero status later this year, upon reaching twenty consecutive years of dividend growth.
- Following a review of the Company’s distribution profile, the first three interim dividends will be increased to smooth payments across the year and reduce reliance on the final dividend; this is a timing adjustment only and does not change the Company’s overall dividend policy.
The Company’s Half Year Report is being published in hard copy format and an electronic copy of that document will shortly be available to download from the Company’s web page at: Schroder Oriental Income Fund Limited
The Company’s Half Year Report will shortly be uploaded to the Financial Conduct Authority’s National Storage Mechanism and will be available for inspection at: https://data.fca.org.uk/#/nsm/nationalstoragemechanism
Chair’s Statement
I am pleased to present my interim report as Chair of the Company. Markets have been unusually volatile in recent months and, against this backdrop, the strong performance of our investment portfolio in the reporting period has been particularly satisfying.
Performance
Asian equities surged in the six months to end-February 2026, reversing earlier consolidation and brushing aside geopolitical noise, with Korea dramatically outperforming. The region’s benchmark rose 30.7% versus a 10.1% gain globally as measured by MSCI World (in Sterling terms), led by AI-linked semiconductor winners such as Samsung Electronics and SK Hynix as memory price expectations jumped on tightening supply fears. During the period under review, the Company’s NAV per share total return was +35.3%, thus outperforming the Reference Index (MSCI AC Pacific ex Japan Index in Sterling terms) by 4.6 percentage points. The share price total return for the six months ended 28 February 2026 was 38.1%.
Performance was strong in both absolute and relative terms, led by effective stock selection in technology, resources and selected financials across several Asia-Pacific markets. The biggest allocation benefit came from maintaining an underweight to China, especially to large internet platform stocks, which outweighed the negative impact of being underweight Korea and overweight Singapore. The portfolio remained focused on core Asia Pacific ex Japan markets, with selective additions and exits, a continued tilt towards technology and financials (though moderated), and small rotations within telecoms and consumer exposures.
Due to the exceptional performance during the period, the Company has accrued a performance fee of £5,246,000. We would like to remind investors that this is the last year that a performance fee will be paid. You can read a more detailed account of the Company’s performance in the Investment Managers’ Review starting on page 6 of the Half Year Report.
Revenue and dividends
Net assets have grown during the period under review, compared to the 12 months prior, which has led to an increase in costs. Dividends inevitably lag the NAV, which has led to a reduction in net revenue return after taxation compared with the prior period; however, the long-term outlook for dividends remains strong.
The Company has paid a first and second interim dividend for the year ending 31 August 2026 of 2.00 pence per share and 2.50 pence per share respectively (2025: 2.00 pence per share for both).
In February 2026, the Board reviewed the Company’s distribution profile and noted that dividend payments have become weighted disproportionately towards the year end. The Board has determined that a measured uplift to the first three interim dividends would help to achieve a more even distribution pattern across the year and reduce reliance on the final dividend. This approach is intended solely to smooth the timing of distributions, rather than to signal any change in the Company’s overall dividend policy.
Following on from this decision, the second interim dividend announced in April 2026 has been set at a higher level than in prior periods and subject to the Company’s distributable income, market conditions and the Board’s ongoing assessment, the Board currently expects the third interim dividend to be broadly in line with the second interim dividend. As a result, the final dividend is expected to represent a smaller proportion of the total annual distribution than in recent years with the size of the final dividend being determined in light of the payments made throughout the year.
Having grown its dividend every year since launch, the Company is classed in the AIC’s next generation of dividend heroes and it remains the Board’s aim to achieve full dividend hero status later this year, on the completion of twenty years of consecutive dividend growth.
Gearing
The Company has a £75 million revolving credit facility with The Bank of Nova Scotia. During the period, the average gearing was 3.5%, contributing modestly, net of financing costs, to your Company’s overall performance.
Discount management
The Board endorses share buybacks when the market price significantly undervalues the portfolio and closely monitors the Company’s share price relative to its NAV, committing to repurchase shares to manage this situation effectively.
During the six months to 28 February 2026, the Company repurchased 3,154,589 ordinary shares. Following this period, as of 20 May 2026, the Company acquired an additional 2,293,186 ordinary shares. The Board remains confident in the intrinsic value of the Company’s investments and will continue to repurchase shares when the discount to NAV is above 5%.
Board changes
I would like to take the opportunity to welcome Shaun Lacey, who has joined the Board as an independent non-executive director. Shaun was appointed to the Board in April 2026, following a rigorous selection process using independent search firm Thomas and Dessain. Shaun is a highly experienced wealth management and banking executive with over 45 years’ industry experience and more than 20 years’ executive Board and corporate governance experience. Based in Guernsey, he has particular expertise in offshore jurisdictions and regulated environments, developed through longstanding senior leadership roles and regular engagement with the Guernsey regulator.
Schroders combination with Nuveen
On 12 February 2026, the Board of Schroders plc announced that they had agreed terms of a recommended cash acquisition by Nuveen, to combine the two businesses. The transaction is not expected to complete until Q4 2026. The Board of Schroder Oriental Income Fund Ltd have been informed that Nuveen’s intention is to maintain continuity across Schroders’ existing investment and client-facing functions, and the Board will monitor progress in this regard.
Further details are available on the Schroders website: https://www.schroders.com/en/global/individual/nuveenoffer/.
Outlook
Since the period end, Asian markets initially sold off and remain volatile as a result of the Middle East conflict which has driven energy prices higher, weighing on a region that imports much of its oil and gas via inflation and rates. That said, the region’s fundamentals and policy frameworks look more resilient than in past cycles, and the key swing factor is duration. An initial bout of disruption could prove manageable if it fades relatively quickly.
Artificial Intelligence-related investments continue to provide an important tailwind for parts of Asian technology, even if the sector remains cyclical. Overall, the approach remains selective and opportunity led for now: staying cautious where energy and policy sensitivity is highest, keeping a meaningful underweight to China, crystallising gains in areas that have run hard, and maintaining an overweight to Australia and Singapore. Valuations still look attractive versus developed markets, even if they are less obviously cheap relative to the region’s own history.
The Board remains convinced that the Portfolio Manager’s focus on quality companies with attractive dividend prospects and potential for capital growth over the long term remains the best way to navigate current market volatility. Sector-leading investment performance is evidence that this approach is as relevant today as it was when the Company was founded over 20 years ago.
Nick Winsor
Chair
20 May 2026