A new investment trust was welcomed to the stock market on Valentine's Day with its chairman, and myself, granted the right to ring the bell at the London Stock Exchange's HQ in central London, signifying the opening of Friday's share trading.

In line with the romantic theme, the new FTSE 250 listed trust is the result of the merger (a happy marriage) of two funds – Invesco Asia and Asia Dragon – to form the £800 million Invesco Asia Dragon.

Although a merger, it was more akin to a friendly takeover with fund group Invesco winning a beauty parade to absorb Asia Dragon and manage the combined assets. Running the 'new' portfolio will be Ian Hargreaves, who with Fiona Yang previously ran Invesco Asia with great success.

For shareholders of the new trust, the merger will bring benefits.

The annual management charge will tickle down to reflect its bigger size, resulting in an ongoing fee of about 0.7 per cent. This compares to those levied by Invesco Asia and Asia Dragon of 1.03 and 0.91 per cent respectively.

They will also enjoy more regular dividends, with payments paid quarterly rather than every six months, while every three years, starting in 2028, shareholders will be able to exit the trust at a small discount to the value of its assets.

With American hedge fund manager Saba causing disruption in the investment trust sector by trying (unsuccessfully so far) to take control of specific funds, chairman of the new combined trust, Neil Rogan, says it is key that boards 'do the very best for shareholders'.

'If you do that as a board,' he adds, the threat posed by 'the arrival of an activist investor [such as Saba] is low'.

Rogan believes that as the biggest trust in the Asia Pacific equity income sector, it should now attract greater interest from wealth managers looking for a home for their clients' money.

Hargreaves, who has been at the helm of Invesco Asia for the past 14 years, says the new trust will be run in exactly the same way. That means investing in 'undervalued companies'. He says: 'As investment managers, we are open-minded about the undervalued companies we invest in.

'They can be relatively high-growth companies, where we see further share price advances, or they can be businesses that are out of favour but where we have great confidence and conviction that the shares are undervalued.'

For any stock to get into the portfolio, Hargreaves must be convinced that it will deliver a 10 per cent compound annual return over the next three years. The result is a portfolio combining familiar tech names such as Taiwan Semiconductor Manufacturing Company (the trust's biggest holding) and Samsung Electronics. These sit alongside recovery stocks such as the Thai bank Kasikornbank.

'As a country, Thailand has had economic issues going back before Covid,' says Hargreaves. 'For Kasikornbank, its profits have been eaten away by bad debts.

'But loan provisions are coming down and it has a lot of spare capital that we believe could be returned to shareholders by way of higher dividend payouts.'

The trust's 40 per cent exposure to China and Hong Kong may deter some investors on ethical and moral grounds, but Hargreaves says that as a manager of an Asian portfolio his single focus is on protecting the trust's capital and making money for shareholders.

Over the past five years at Invesco Asia, he and Yang have delivered total returns of 49 per cent – and it's that performance record that Invesco Asia Dragon will inherit.