**Summary**
Schroder Japan Trust PLCs half-year financial report for the six months ended January 31, 2026, highlights strong performance, with a net asset value (NAV) increase of 18.9%, outperforming the benchmark by 4.0% and 4.1% annually over five and ten years, respectively. The portfolios focus on value opportunities, generative AI stocks, and improving domestic inflation dynamics contributed to this success. Key holdings like Infroneer and Sanki Engineering delivered strong returns. The trust received an AAA rating from Citywire and was included in the AICs 2026 ISA Millionaire list.
Management fees are set to decrease from 0.75% to 0.70% on the first £200 million and 0.65% thereafter, charged on the lower of market capitalization or NAV, expected to enhance returns per share. The Boards share repurchase strategy narrowed the discount to NAV from 12.9% to 6.7%. An enhanced dividend policy aims to pay out 4% of the average NAV annually.
The investment strategy emphasizes undervalued stocks, with a focus on market misperception, oversight, and short-term overreaction, resulting in a high active share and a bias towards value and smaller companies. Top contributors included Fujikura, JX Advanced Metals, and Ibiden, while detractors were led by Advantest and LY Corp.
Looking ahead, the trust remains optimistic about Japanese equities, citing corporate governance reforms, capital discipline, and the shift from deflation to inflation as supportive factors. However, geopolitical tensions and AI investment cycle concerns may introduce volatility. The trust is well-positioned to capitalize on opportunities, leveraging its on-the-ground research capabilities in Japan.
| Financial Metric | 2025 (Year) | 2025 (Half-Year) | 2026 (Half-Year) |
|---|---|---|---|
| Net Asset Value (NAV) Increase | N/A | N/A | 18.9% |
| Benchmark Return | N/A | N/A | 15.3% |
| Share Price Total Return | N/A | N/A | 27.4% |
| Gearing Level | 13.4% (July 2025) | N/A | 12.4% (January 2026) |
| Net Return After Taxation (£'000) | 20,968 | 12,286 | 63,862 |
| Total Equity Shareholders' Funds (£'000) | 344,577 | 343,252 | 399,008 |
| Net Asset Value per Share (pence) | 298.35 | 296.46 | 348.47 |
| Total Dividends Paid (£'000) | 22,490 | 15,828 | 6,630 |
| Debt (Creditors: amounts falling due within one year, £'000) | 2,460 | 2,798 | 2,455 |