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Schroder Japan Growth delivers top returns

Schroder Japan Growth Fund chalks up the best long-term returns in a difficult market.
April 4, 2012

Schroder Japan Growth Fund is the top-performing Japan investment trust focused on larger companies over one and five years both in terms of net asset value (NAV) and share price. The trust aims for growth in excess of the Tokyo Stock Exchange First Section Total Return Index over the longer term, and succeeds in doing this over one and three years.

96.14p

The trust invests in Japanese companies with a proven track record and solid profits growth prospects that are not fully reflected in the share price. Its manager believes that valuation discrepancies are caused by short-term sentiment, and tend to narrow in the long term as other investors take advantage of goo- value share prices among good-quality companies.

The trust has no constraints in the size of company it invests in or sector allocation, allowing it to take advantage of changes in market sentiment and in the domestic economic cycle as it develops. However, no more than 15 per cent of the trust's total net assets can be invested in any single company at the time of acquisition.

The trust doesn't pay dividends, but its board is discussing introducing these, and proposals will be put to shareholders this year.

The trust has an experienced manager in Andrew Rose, who has over 25 years of investment experience, largely with Japanese equities. He has run this investment trust since 2007.

However, the trust's holdings include smaller companies that can add volatility to returns and, although it trades at a discount to NAV, this is already tighter than its 12-month average.

 

SCHRODER JAPAN GROWTH (GB0008022849)

PRICE96.14pGEARING110%
AIC SECTOR JapanNAV109.43p
FUND TYPEInvestment trustPRICE DISCOUNT TO NAV-10.75%
MARKET CAP£120.63m1-YEAR PRICE PERFORMANCE9.66%
No OF HOLDINGS:83*3-YEAR ANNUALISED PRICE PERFORMANCE16.20%
SET-UP DATE11-Jul-945-YEAR ANNUALISED PRICE PERFORMANCE-1.60%
TOTAL EXPENSE RATIO1.69%MORE DETAILSwww.schroders.com

Source: Morningstar, *Schroders. Performance data as at 2 April 2012.

 

TOP TEN HOLDINGS as at 29 February 2012

Toyota Motor5.7
Mitsui & Co4.7
SK Kaken3.6
Hi Lex3.5
East Japan Railway3.3
Bridgestone3.3
Sumitomo Mitsui Financial2.8
Seven & I Holdings2.4
T&D Holdings2.3
NKSJ Holdings2.3

 

Sector breakdown

Industrials32.1
Financials19.5
Consumer Goods18.3
Consumer Services17.7
Basic Materials7.6
Healthcare4.7
Telecommunications4.5
Technology4.4
Oil & Gas2.3
Cash-11.3