Schroder Japan Trust [LON:SJG] has posted another year of strong performance, outpacing its benchmark as its manager’s focus on undervalued Japanese companies and smaller growth names continued to deliver results.
For the year to 31 July 2025, the trust’s net asset value (NAV) per share total return rose 6.8 per cent, outperforming the TOPIX Total Return Index, which gained 4.8 per cent over the same period. The outperformance marks a sixth consecutive year of positive relative returns under Masaki Taketsume, who has managed the portfolio since 2019. Over his tenure, the cumulative fair-value NAV has exceeded the benchmark by 17 per cent.
The trust’s chairman, Philip Kay, struck an upbeat tone, saying that the backdrop for Japanese equities remained favourable for active investors. “The current environment is particularly well suited to active stock pickers,” he said. “Given Masaki’s disciplined and proven approach, we are confident in the opportunity that lies ahead for the company’s shareholders.”
Focus on value and mid-caps
Taketsume’s investment strategy emphasises identifying companies undergoing structural change that have yet to be fully recognised by the market. Over the past year, performance was boosted by holdings in smaller and mid-sized firms benefiting from corporate reforms, improving governance standards and shareholder-friendly policies encouraged by the Tokyo Stock Exchange.
Japan’s equity market has enjoyed renewed international attention amid the weak yen, rising corporate buybacks and improving return on equity across sectors. Schroder Japan Trust’s results suggest that selective, active strategies have been well placed to benefit from those trends.
Progressive dividend policy
The trust also highlighted its enhanced dividend policy, under which it has distributed 4 per cent of its average NAV over the past year. The change, introduced to provide a more consistent income stream, is part of a broader effort to appeal to a wider base of retail investors while maintaining capital growth potential.
Shareholders will vote on the continuation of this policy at the forthcoming AGM. The meeting will also review the trust’s long-term performance and portfolio positioning, with management expected to reaffirm its focus on quality companies trading below intrinsic value.
With assets positioned across Japan’s industrial, consumer and technology sectors, the trust remains one of the longest-established vehicles for UK investors seeking exposure to the world’s third-largest economy. As Japanese corporates continue to unlock value through reform and shareholder returns, Schroder Japan Trust’s management believes the opportunity set remains compelling.
AloJapan.com