The SmartETFs Asia Pacific Dividend Builder ETF (ADIV) issued its monthly update for September. Despite underperforming its index on the month, ADIV rose 0.39%. According the update, “The results have been overwhelmingly positive, and none contained any unpleasant surprises. We hold a diverse range of companies in the Fund and these results have given us a useful insight into operating conditions in Asia as the problems caused by COVID continue to oscillate.”
ADIV is designed to give investors exposure to high quality dividend growers in one of the world’s fastest growing regions. It utilizes a high conviction, low turnover portfolio of consistently profitable dividend paying companies.
Their best performing holding on the month was Tech Mahindra, and India-based IT services company with a focus on 5G. It was up 21.9% on the month. The company was hit hard with a sell-off in 2020, but recovered by the end of the year and has been surging for the past 12 months.
Other highlights in their holdings include Sonic Healthcare, which reported a revenue on the year of $8.75 billion, up 28% YoY, with COVID testing directly contributing to $2.1 billion of that total. Earnings per share rose 141%, with dividends increasing 8% as the management team at Sonic Healthcare recognizes that COVID-related revenue will subside and that merger and acquisition activity is the best tactic for permanent value creation.
Pharmaceutical company Zhejiang Supor released their first half of 2021 report and saw a 27% uptick in revenues with profits up 30% thanks to improved cost control and increased pricing power. They also saw a 68.6% boost in export sales compared to the same period last year.
NetEase had surprisingly good results for Q2 21, with the gaming company largely feeling that the Chinese clampdown on gaming time for children won’t affect their model much. Management disclosed that less than 1% of their revenue comes from the targeted group, and their revenue is up 13% YoY.
China Resources Gas saw a 35.6% boost to net profits, largely off a 29.5% rebound in fuel sales.
ADIV’s focus on quality companies with smart management teams has enabled ADIV to continue to find success despite regional political turmoil and the ongoing COVID-19 pandemic.
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