14th Apr 2025 11:31
(Alliance News) - Schroder Japan Trust PLC on Monday reported a "solid" performance in the first half of its financial year and said Japan remains a "compelling investment opportunity".
The trust said its net asset value total return for the six months ended January 31 was 4.0%, ahead of the 1.4% return from its benchmark, the Tokyo Stock Price index. Its share price total return was 3.2%.
Chair Philip Kay said the portfolio's value bias and disciplined stock picking had helped navigate market uncertainty. "Masaki Taketsume, supported by his Tokyo-based team, continues to be well-placed to outperform... as he has done for the last five years," Kay said.
The trust maintained its overweight position in small and mid-cap value stocks and noted that gearing, applied via contracts for difference, reached 15% at the end of the period and contributed positively to returns.
Shares in Schroder Japan Trust traded at a 12% discount to NAV at period-end, wider than the 11% discount at the start of the half-year. The trust repurchased 1.6 million shares during the period in an effort to manage the discount.
Under its enhanced dividend policy, the trust continues to pay out 4% of average NAV annually in quarterly instalments. The trust said this would not alter its long-term investment approach.
Schroder Japan Trust remains optimistic about the Japanese market, citing supportive macroeconomic trends, including rising wages and corporate capital investment, as well as regulatory efforts to improve returns on equity and shareholder value.
"The Japanese equity market has delivered impressive growth over the last eighteen months, with the Nikkei 225 finally exceeding its late 1980s bubble-era high. We believe this marks the beginning of a new era for Japanese equities, underpinned by structural improvements that have the capacity to drive sustained earnings growth and rising valuations for many years," said Taketsume.
Shares in Schroder Japan Trust were up 2.5% at 233.60 pence in London on Monday morning.
By Eva Castanedo, Alliance News reporter
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