Schroder Japan Trust
Company Notes
Governance reforms and macro tailwinds
Background: Schroder Japan Trust* (SJG) aims to achieve capital growth from an actively managed portfolio of Japanese stocks. The fund has been managed by Masaki Taketsume since July 2019, supported by Schroders’ Japanese Equity team based in Tokyo. The manager has a bottom-up investment approach, driven by in-house fundamental research. We met with Masaki Taketsume on 7 July 2023.
Portfolio: As at 30 June, the portfolio contained 64 stocks and the active share relative to the TOPIX was 80%. The focus on ‘mispriced’ stocks leads to a tilt towards value investments (portfolio P/E of 13.5x vs TOPIX 15.7x) and mid and small caps (59% of portfolio vs 37% of index).
Performance: Over the last five years, SJG has delivered a NAV total return of +18.3%, marginally underperforming the +19.1% return of the TOPIX as well as the +18.6% return of the Japan peer group. The fund has tended to underperform in periods when a value investment style underperforms, and vice versa. Nevertheless, the manager expects stock selection, and not style, to drive performance. SJG has outperformed both the TOPIX and the TOPIX Value index in NAV total return terms in six of the last 10 full calendar years.
*Denotes a corporate broking client of Winterflood Securities
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