Schroder Tokyo Fund. Final Short Report 1 March 2015 to 28 February 2016

Transcription

1 Schroder Tokyo Fund Final Short Report 1 March 2015 to 28 February 2016

2 Review of Investment Activities From 27 February 2015 to 26 February 2016, the price of A Accumulation units on a selling price to selling price basis rose 1.57%. In comparison, the Tokyo Stock Exchange First Section Index generated a total return of 2.62% 1 in sterling terms. 1 Source: Thomson Reuters Datastream. It was a volatile twelve months for the Japanese equity market, with performance fluctuating at different times according to the influences of Abenomics, yen strength, the China slowdown and corporate results. Most notable perhaps were the sharp market falls witnessed in the third quarter. The main trigger for the downturn was the Chinese renminbi devaluation in August, which raised concerns over a Chinese economic slowdown and its impact on Japan. However, global markets rebounded in October and November as an impending US interest rate hike signalled the strength of the US economy. Early 2016 trading saw further weakness notwithstanding further easing of monetary policy in the shape of introduction of negative interest rates. Sterling investors benefited from the strong appreciation of the yen versus sterling over the twelve month period. At a sector level our overweight exposure to the retail trade sector helped returns, as did an underweight exposure to air transportation. Meanwhile, our underweight exposure to the foods sector detracted. At the individual stock level, the top contributor to returns over the period was Koito Manufacturing, followed by Nippon Telegraph & Telephone, Japan Airlines and Nintendo. On the other side of the ledger, the main detractors from returns were Japan Tobacco (which we didn t hold), Sumitimo Mitsui Financial Group and TDK. Fund Manager: Andrew Rose

3 Fund Information Interim Final Accounting dates 31 August 28 February Revenue allocation date 30 April For the year For the year Ongoing charges figure to to A Income units 1.66% 1.67% A Accumulation units 1.66% 1.67% GBP Hedged A Income units 1.66% 1.67% GBP Hedged A Accumulation units 1.66% 1.67% GBP Hedged L Accumulation units 0.84% 0.84% 1 GBP Hedged Z Income units 0.91% 0.91% GBP Hedged Z Accumulation units 0.91% 0.91% H Income units 0.66% 0.67% H Accumulation units 0.66% 0.67% L Income units 0.84% 0.84% L Accumulation units 0.84% 0.84% S Income units 0.54% 0.54% Z Income units 0.91% 0.91% Z Accumulation units 0.91% 0.91% 1 The Ongoing charges figure is annualised based on the fees incurred during the accounting period. Record Net Asset Net Asset Value as at Value as at Net Asset Value Fund performance pence per unit pence per unit % change A Income units A Accumulation units GBP Hedged A Income units (15.02) GBP Hedged A Accumulation units (14.79) GBP Hedged L Accumulation units (13.77) GBP Hedged Z Income units (14.78) GBP Hedged Z Accumulation units (13.83) H Income units H Accumulation units L Income units L Accumulation units S Income units Z Income units Z Accumulation units

4 Record (continued) 3 months 1 year 5 years Schroder Tokyo Fund (2.47)% 1.57% 34.83% Tokyo Stock Exchange First Section Index (3.56)% 2.62% 28.74% Fund Source: A Accumulation units on a selling price to selling price basis to Index Source: Thomson Reuters Datastream, total return in sterling terms to The performance of hedged unit classes may differ from other unit classes of the fund because the return on unhedged unit classes is based on both the performance of the fund s investments and the performance of the portfolio currency relative to sterling whereas the return on hedged unit classes is based only on the performance of the fund s investments. Comparative Tables A Income units Opening net asset value Return before operating charges Operating charges (4.11) (3.54) (3.50) Return after operating charges* Distributions 1 (0.18) (0.20) (0.24) Closing net asset value *after direct transaction costs of Return after charges (%) Closing net asset value ( 000 s) 130, , ,926 Closing number of units 54,152,016 60,126,731 80,141,739 Operating charges (%) Highest buying price (p) Lowest selling price (p)

5 A Accumulation units Opening net asset value Return before operating charges Operating charges (4.25) (3.66) (3.62) Return after operating charges* Closing net asset value Retained distributions *after direct transaction costs of Return after charges (%) Closing net asset value ( 000 s) 465, , ,224 Closing number of units 185,937, ,986, ,838,634 Operating charges (%) Highest buying price (p) Lowest selling price (p)

6 GBP Hedged A Income units Opening net asset value Return before operating charges (8.79) Operating charges (1.16) (0.93) (0.61) Return after operating charges* (9.95) Distributions 1 Nil 2 (0.05) Nil Closing net asset value *after direct transaction costs of Return after charges (%) (15.02) Closing net asset value ( 000's) Closing number of units 64, , ,358 Operating charges (%) Highest buying price (p) Lowest selling price (p) The unit class was launched on 1 July There will not be a distribution as the total amount distributable was below de minimis.

7 GBP Hedged A Accumulation units Opening net asset value Return before operating charges (8.66) Operating charges (1.13) (0.95) (0.61) Return after operating charges* (9.79) Closing net asset value Retained distributions Nil *after direct transaction costs of Return after charges (%) (14.79) Closing net asset value ( 000's) 6,150 13,455 2,289 Closing number of units 10,902,931 20,326,733 4,409,598 Operating charges (%) Highest buying price (p) Lowest selling price (p) The unit class was launched on 1 July 2013.

8 GBP Hedged L Accumulation units Financial year to 28 February p per unit p per unit Opening net asset value Return before operating charges (8.42) Operating charges (0.56) (0.42) Return after operating charges* (8.98) Closing net asset value Retained distributions *after direct transaction costs of Return after charges (%) (13.77) Closing net asset value ( 000's) 69,175 58,499 Closing number of units 123,035,042 89,724,700 Operating charges (%) Direct transaction costs (%) 2 ** (0.02) (0.02) Highest buying price (p) Lowest selling price (p) The unit class was launched on 9 May 2014.

9 GBP Hedged Z Income units Opening net asset value Return before operating charges (8.64) Operating charges (0.63) (0.52) (0.34) Return after operating charges* (9.27) Distributions 1 (0.55) (0.47) (0.14) Closing net asset value *after direct transaction costs of Return after charges (%) (13.95) Closing net asset value ( 000's) 97, ,240 50,016 Closing number of units 172,492, ,466,576 96,023,909 Operating charges (%) Highest buying price (p) Lowest selling price (p) The unit class was launched on 1 July 2013.

10 GBP Hedged Z Accumulation units Opening net asset value Return before operating charges (8.66) Operating charges (0.63) (0.52) (0.35) Return after operating charges* (9.29) Closing net asset value Retained distributions *after direct transaction costs of Return after charges (%) (13.83) Closing net asset value ( 000's) 172, , ,452 Closing number of units 297,737, ,354, ,896,744 Operating charges (%) Highest buying price (p) Lowest selling price (p) The unit class was launched on 1 July 2013.

11 H Income units Opening net asset value Return before operating charges (2.50) Operating charges (0.38) (0.34) (0.08) Return after operating charges* (2.58) Distributions 1 (0.63) (0.56) Nil Closing net asset value *after direct transaction costs of Return after charges (%) (5.16) Closing net asset value ( 000's) 2,789 1,467 1 Closing number of units 4,911,250 2,605,814 2,000 Operating charges (%) Highest buying price (p) Lowest selling price (p) The unit class was launched on 6 January 2014.

12 H Accumulation units Opening net asset value Return before operating charges (2.50) Operating charges (0.39) (0.34) (0.08) Return after operating charges* (2.58) Closing net asset value Retained distributions Nil *after direct transaction costs of Return after charges (%) (5.16) Closing net asset value ( 000's) 28,407 12,871 1 Closing number of units 48,988,744 22,628,674 2,000 Operating charges (%) Highest buying price (p) Lowest selling price (p) The unit class was launched on 6 January 2014.

13 L Income units Opening net asset value Return before operating charges (1.77) Operating charges (0.49) (0.42) (0.23) Return after operating charges* (2.00) Distributions 1 (0.54) (0.48) Nil Closing net asset value *after direct transaction costs of Return after charges (%) (4.00) Closing net asset value ( 000's) 71,676 14,190 4 Closing number of units 124,838,081 24,919,243 8,522 Operating charges (%) Highest buying price (p) Lowest selling price (p) The unit class was launched on 1 October 2013.

14 L Accumulation units Opening net asset value Return before operating charges (1.85) Operating charges (0.50) (0.43) (0.15) Return after operating charges* (2.00) Closing net asset value Retained distributions Nil 3 *after direct transaction costs of Return after charges (%) (4.00) Closing net asset value ( 000's) 283, , Closing number of units 485,468, ,934,140 1,433,414 Operating charges (%) Highest buying price (p) Lowest selling price (p) The unit class was launched on 1 October There was no distribution as the total amount distributable was below de minimis.

15 S Income units Opening net asset value Return before operating charges (0.42) Operating charges (0.33) (0.28) (0.08) Return after operating charges* (0.50) Distributions 1 (0.73) (0.64) 0.00 Closing net asset value *after direct transaction costs of Return after charges (%) (1.00) Closing net asset value ( 000's) 11,885 11,281 12,477 Closing number of units 20,041,897 19,182,785 25,202,999 Operating charges (%) Highest buying price (p) Lowest selling price (p) The unit class was launched on 31 January 2014.

16 Z Income units Opening net asset value Return before operating charges Operating charges (0.67) (0.58) (0.57) Return after operating charges* Distributions 1 (0.61) (0.54) (0.55) Closing net asset value *after direct transaction costs of Return after charges (%) Closing net asset value ( 000's) 303, , ,117 Closing number of units 422,360, ,990, ,569,440 Operating charges (%) Highest buying price (p) Lowest selling price (p)

17 Z Accumulation units Opening net asset value Return before operating charges Operating charges (0.69) (0.60) (0.58) Return after operating charges* Closing net asset value Retained distributions *after direct transaction costs of Return after charges (%) Closing net asset value ( 000's) 362, , ,117 Closing number of units 482,344, ,753, ,379,936 Operating charges (%) Highest buying price (p) Lowest selling price (p) These figures have been rounded to 2 decimal places. 2 The amount received from dilution adjustments, that relate to direct transaction costs, is greater than the direct transaction costs incurred by the fund within the period/year. ** Direct transaction costs have been stated after deducting the proportion of the amounts collected from dilution adjustments. The Operating charges are calculated on an ex-post basis and as such may differ from the Ongoing charges figure where the Ongoing charges figure has been annualised for a unit class that has not yet been in existence for a full year. Please remember that past performance is not a guide to future performance and it might not be repeated. The value of investments and the revenue from them may go down as well as up and investors may not get back the amount originally invested. Because of this, you are not certain to make a profit on your investments and you may lose money.

18 Portfolio Information % of net % of net assets assets Spread of as at as at investments Oil & Gas Basic Materials Industrials Consumer Goods Health Care Consumer Services % of net % of net assets assets as at as at Telecommunications Utilities Financials Technology Japanese Yen Denominated Derivatives (1.28) 0.01 Net other assets % of net assets as at Major holdings Toyota Motor 4.21 Bridgestone 3.59 KDDI 3.51 East Japan Railway 3.43 Nippon Telegraph & Telephone 3.32 Sompo Japan Nipponkoa Holdings 3.09 Sumitomo Mitsui Financial Group 2.98 Mitsui & Co 2.51 Japan Airlines 2.50 HI-LEX 2.37 % of net assets as at Toyota Motor 4.90 Bridgestone 3.15 Sumitomo Mitsui Financial Group 3.13 KDDI 3.00 Sompo Japan Nipponkoa Holdings 2.92 East Japan Railway 2.92 Mitsui & Co 2.82 HI-LEX 2.54 TDK 2.50 Mitsubishi Financial Group 2.39 Investment Objective & Policy The fund s investment objective is to achieve capital appreciation through participation in the growth of the Japanese economy. Investment will be based primarily on Japan s economic strengths, such as its manufacturing industry (in particular on those parts of it that are demonstrating an ability to exploit newly emerging technology) and on sectors benefiting from structural change in the economy. Investment will be in directly held transferable securities. The fund may also invest in collective investment schemes, warrants and money market instruments.

19 Risk Profile Risk and reward indicator Lower risk Potentially lower reward Higher risk Potentially higher reward The risk category was calculated using historical performance data and may not be a reliable indicator of the fund s future risk profile. The fund is in this category because it can take higher risks in search of higher rewards and its price may rise and fall accordingly. The fund s risk category is not guaranteed to remain fixed and may change over time. A fund in the lowest category does not mean a risk free investment. Specific risks The fund invests in assets which are exposed to currencies other than sterling. For non-hedged unit classes exchange rates may cause the value of overseas investments and the revenue from them to rise or fall. There is no guarantee that the hedging strategy applied in hedged unit classes will entirely eliminate the adverse effects of changes in exchange rates between the base currency and the portfolio currency. In addition, it should be noted that hedging transactions will be entered into whether or not the currency of a hedged unit class is declining or increasing in value in relation to the base currency or portfolio currency. Hedged unit classes aim to provide investors with a return correlated to the portfolio currency performance of the fund by reducing the effect of exchange rate fluctuations between the base currency and the portfolio currency. As it is not possible to legally segregate unit classes liabilities from those of other unit classes in the fund, there is a risk that, in certain limited circumstances, the hedging transactions undertaken in relation to a hedged unit class could result in liabilities which might affect the net asset value of the other unit classes in the fund. The fund invests solely in the securities of a particular country. There may be a greater risk than investing in funds that hold securities in a range of countries. For these reasons, the purchase of units should not normally be regarded as a short term investment.

20 Report & Accounts This document is a short report for the Schroder Tokyo Fund for the year ended 28 February The long form Report & Accounts for the fund are available on our website or upon written request to Schroders, FREEPOST, RLTZ-CHSY-HBUT, PO Box 1102, Chelmsford, Essex CM99 2XX. Other Information The information contained in this report is designed to enable unitholders to make an informed judgement on the activities of the fund during the period it covers and the results of those activities at the end of the period. For more information about the activities and performance of the fund during this and previous periods, please contact the Manager. The Prospectus, the Key Investor Information Document and details of investment charges and costs are available on request or can be downloaded from our website Please remember that past performance is not a guide to future performance and it might not be repeated. The value of investments and the revenue from them may go down as well as up and investors may not get back the amount originally invested. Because of this, you are not certain to make a profit on your investments and you may lose money. For investors security, calls to Schroder Investor Services may be recorded. Manager: Schroder Unit Trusts Limited, 31 Gresham Street, London EC2V 7QA. Authorised and regulated by the Financial Conduct Authority. Investment Adviser: Schroder Investment Management Limited, 31 Gresham Street, London, EC2V 7QA. Authorised and regulated by the Financial Conduct Authority. Trustee: J.P. Morgan Europe Limited, Chaseside, Bournemouth BH7 7DA. Authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and Prudential Regulation Authority. Independent Auditors: PricewaterhouseCoopers LLP, Atria One, 144 Morrison Street, Edinburgh EH3 8EX. For further literature please contact Schroder Investor Services on or at investorservices@schroders.com, or visit our website at Issued in April 2016 by Schroder Unit Trusts Limited, 31 Gresham Street, London EC2V 7QA. Registered No: England. Authorised and regulated by the Financial Conduct Authority. w35659 MR049BF16