8th Oct 2025 10:52
(Alliance News) - Schroder Japan Trust PLC on Wednesday reported a significant slowdown in total returns for financial 2025 compared to the previous year, but it performed ahead of its benchmark.
The London-based investor in Japanese equities posted a net asset value of 260.00 pence per share as at July 31, down 2.3% from 266.00p on-year.
NAV total return for the year that ended July 31 fell to 6.8% from 21.0% in financial 2024. Nonetheless, Schroder Japan beat its benchmark, the Tokyo Stock Price index, whose total return was 4.8%.
Schroder Japan last month proposed a fourth interim dividend of 2.85 pence, versus none declared the year prior, thereby lifting the total dividend for financial 2025 to 11.43p from 10.81p in financial 2024.
Top contributors to the past-year portfolio performance included Fujikura Ltd, Sanki Engineering Co Ltd, Hitachi Ltd, Daiichi Sankyo Co Ltd and Shin Etsu Chemical Co Ltd, with Schroder Japan pointing to its "emphasis on undervalued companies benefiting from structural change, and its exposure to small and mid-sized businesses."
The investment company cited "short-term weakness" in semiconductors and chemicals as a drag on performance, citing its main portfolio detractors as Mitsubishi Heavy Industries Ltd, Sony Group Corp, Nintendo Co Ltd, Mitsubishi UFJ Financial Group Inc and Mitsui Chemicals Inc.
Nonetheless Schroder Japan maintained a "bright" outlook, praising Japan's "corporate governance reforms" for attracting investors back to the region, and noting signs of economic improvement.
"Rising wages, increased business investment and sustained positive inflation suggest that a virtuous economic cycle may finally be taking hold, marking a departure from the deflationary pressures that have defined much of the last three decades," Schroder Japan said, adding the caveat that food price inflation "is creating problems for Japanese households," and weakening confidence in the ruling Liberal Democratic Party.
On Saturday, Sanae Takaichi hailed a "new era" after winning the leadership of the LDP, putting her on course to become Japan's first woman prime minister. The 64-year-old, whose hero is Margaret Thatcher, said that a "mountain of work" lay ahead to restore the fortunes of the LDP, which has been haemorrhaging support of late.
Schroder Japan Chair Philip Kay called current conditions "particularly well suited to active stock pickers", due to the disparate valuations which Schroder Japan sees within the Japanese market.
Schroder Japan will hold its annual general meeting on December 1.
The stock was down 0.2% to 289.48p on Wednesday morning in London. It has risen 13% in the last 12 months.
By Holly Munks, Alliance News reporter
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