Schroder Japan (SJG), the best performer in its sector over one and ten years, has announced a cut in the annual management fee it pays Schroders. From August the £382m investment trust will pay 0.7% of its first £200m of assets, down from 0.75%, and 0.65% above that. More importantly, the fee will be applied to the lower of either net asset value (NAV) of its investments or the market value of its shares, as opposed to just NAV currently. Given SJG shares stand on an 11% discount to NAV, shareholders will see an immediate saving which the board said would enhance returns per share. The announcement came in half-year results showing fund manager Masaki Taketsume generated an underlying total return of 18.9% in the six months to 31 January, beating the Topix index return of 15.3%. Spending on artificial intelligence, fading US tariff fears and enthusiasm for Prime Minister Takaichi’s stimulus policies boosted the market in the period, although since the end of February the US-led war on Iran had weighed on sentiment. “Whilst the market remains concerned about Japan’s dependency on the Middle East for its energy supply, it is worth highlighting that Japan holds some eight months’ worth of oil reserves in storage, suggesting that short-term risk of energy supply shock is limited,” said Taketsume. Over one year, despite their discount to NAV, SJG shares have returned 48.7%. Over 10 years they have returned over 212%, the best of the four large-cap trusts in the AIC Japan sector.
James Carthew, head of investment company research at QuotedData, said: “It’s good to see another decent set of figures from Schroder Japan, and all the better as they come with a cut to the management fee. We particularly approve of the decision to base the fee on market cap rather than NAV.”
Finsbury Growth & Income’s (FGT) portfolio of data and software stocks, consumer brands and asset managers fell 7.8% in March, underperforming the FTSE All-Share index which slid 6.7% in response to the oil price shock coming from the Middle East. Fund manager Nick Train, who is under pressure after five years of underperformance, said “dismantling the portfolio and selling out of companies of the calibre we own at this juncture would not be in the interests of investors”. He reiterated his belief that Diageo and Burberrys were “meaningfully undervalued” after their shares endured bear markets in the past two-three years, and was hopeful that Unilever would grow more quickly and rerate after the proposed merger of its food business with McCormick of the US. Similarly, he retained his conviction that Autotrader, Experian, LSEG, RELX, Rightmove and Sage would all recover from their recent selloff on fears of the threat from artificial intelligence, arguing that their “constantly replenishing” datasets would prove highly valuable and impossible to replicate. However, he conceded that Nuveen’s acquisition of Schroders meant that the “glory days of generalist active investment management are, at least temporarily, over” and he was unlikely to re-invest his 8% stake in the sector. He also said the turmoil in shipping caused by the US-led war on Iran and the blockade of the Strait of Hormuz had benefited shipbroker Clarksons, a 4% holding, whose shares recently hit an all-time high.
Seraphim Space (SSIT) has called a general meeting on 6 May for shareholders to approve the C-share issue it said on Monday it was considering. “The timing and quantum of any fundraise will be subject to market conditions, and the board is seeking the necessary shareholder approvals for a C-share issue now in order to be able to raise funds in a timely manner when market conditions are deemed appropriate,” the £438m investment trust said. SSIT shares have soared to a 30% premium above net asset value after a 278% surge in the past year that has seen its biggest unquoted space technology companies advance on strong demand for their services from governments and companies. Over three years the shares have rocketed 411%, although since launch in 2021 total returns have been 88%, reflecting the declines in 2022 and 2023 as interest rates rose.
Onward Opportunities (ONWD), the £36m UK smaller companies trust run by Laurence Hulse at Dowgate Wealth, has moved from the junior Alternative Investment Market (AIM) to the main market where it hopes it will benefit from improved visibility. The shares stand on a 4% premium to net asset value that has enabled the company to make 11 share issues, raising £30m since its flotation in 2023.
LondonMetric Property (LMP), the £4.5bn real estate investment trust considering a joint bid with Schroder Real Estate (SREI) for Picton Property (PCTN), has issued a full-year trading update saying its portfolio, which was expanded by the acquisition of Urban Logistics last year, “continues to perform well and occupier demand remains strong”. It expects to lift the full-year dividend per share by 4% to 12.45p.
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