City of London (CTY ) manager Job Curtis has climbed up the Citywire investment trust rankings, reclaiming an AA rating in August.

The Janus Henderson manager enjoyed an AA rating in six months out of eight this year but fell to A-rated at the end of February and June. He made up lost ground in July.

Over the three years to the end of July, his £2.5bn UK equity trust returned 40.9%, making it the fourth best performer in the 18-strong UK Equity Income sector. This easily outpaced a 30.2% return from the sector average.

Over one year, CTY is ranked third out of 18 with an NAV total return of 15.3% versus a 9.2% gain by peers, beaten only by Temple Bar (TMPL ) and stablemate Law Debenture (LWDB ).

Curtis believes investors are finally waking up to the value on offer in the UK market, which he described as ‘compelling compared with equivalents overseas’.

In his latest trust update, he said the UK economy was somewhat shielded by uncertainty around US trade tariffs given the ‘bias towards services’, while the US faces ‘adverse implications for inflation and economic growth’.

Ratings turnaround

Schroder manager Masaki Taketsume has also started to make his way up the rankings once again.

The manager of the £322m Schroder Japan Trust (SJG ) enjoyed a four-month stint at the top between November and February but fell to an A rating in May. At the end of July, Taketsume made it back up to AA.

His fund is ranked three out of five trusts in the Equities – Japan sector with a net asset value (NAV) total return of 44.4% versus a 34.3% gain by the average fund in the sector. Over five years, the fund is even further ahead with a 83.2% gain versus 46.6% by the sector average.

However, the manager is lagging over one year with a 6.8% return versus 8.6% by peers.

Japanese stocks have been affected by US trade tariffs this year, with exporters facing a more uncertain environment, but Taketsume said one feature of the Japanese market stands out.

‘The volume and scale of share buybacks announced so far this year have already exceeded last year’s record pace,’ he said in a recent fund update.

‘That’s a striking data point, particularly given the geopolitical uncertainty. It speaks to an ongoing shift in Japanese corporate behaviour, where improving return on equity and enhancing shareholder value are now central tenets of boardroom strategy.’

He added that the return of capital acts as ‘a strong counterweight to short-term macro uncertainty’. 

Taketsume is confident that the trust’s bias towards domestically oriented small and mid-caps will benefit from Japan’s ‘internal growth drivers’ and ongoing governance reforms.

The most recent addition to the fund is JX Advanced Metals, which was spun-off from Eneos to ‘accelerate its focus on higher growth markets, including the production of value-added materials used in advanced electronics and communications infrastructure’.

‘This shift should enhance long-term returns and improve capital efficiency over time,’ said Taketsume.

Cashing in on commodities

Baker Steel (BRST ) duo Trevor Steel and Mark Burrdige have added to their burgeoning ratings track record, receiving an A rating at the end of July.

The pair earned a rating for the fourth consecutive month, having first entered the charts in May at + rated.

Their £113m portfolio of natural resources stocks has delivered an NAV total return of 33.5% over the three years to the end of July, ranking it third out of seven trusts in the Commodities & Natural Resources sector and putting it just slightly ahead of a 33.2% gain by the sector average. 

Performance has been more impressive over the past year, with the Guernsey-registered fund up 37.1% against 14.2% by the sector average.

In a second quarter update, the managers highlighted Tungsten West (TUN) as a contributor to performance. The mining development company recently announced plans to restart mining operations in Devon. Futura Resources – which makes up a quarter of the portfolio – also mined the first coal from its second mine.

For the rest of the year, Steel and Burridge noted their largest position – cement producer Cemos – is looking at potential project developments in Morocco.

They said it is still too early to gauge the effects of US tariffs on the medium and long-term prices of commodities.

‘Although the risk of a slowdown in global GDP growth has increased, which could be expected to be detrimental to bulk commodities and base metals, gold in particular may continue to benefit as an alternative store of value to the US dollar,’ the managers said.

‘The growing trend towards resource protectionism could have more specific impacts on individual portfolio assets, with China already limiting the export of certain key minerals, including tungsten.’

China recovery

Fidelity’s Dale Nicholls has been awarded his first ever A rating after Chinese stimulus plans kickstarted a turnaround in both Asian markets and investor sentiment.

Nicholls moved to an A rating at the end of July after his £1.4bn Fidelity China Special Situations (FCSS ) trust took full advantage of the rebound in Chinese markets.

He had been + rated the previous three months and prior to this he was only ranked once, achieving a + rating in February 2024.

The dry spell in ratings reflects investors’ concerns about China’s failure to kickstart its economy following the Covid pandemic. Since September, the market is back on track following Beijing’s decision to launch a huge stimulus package in a bid to breathe life into the ailing property market and halt deflation.

The size of the fiscal support helped markets to show resilience when faced with higher US trade tariffs and an escalation of a tit-for-tat trade war between the two superpowers.  

The trust has returned 27.4% over three years, ahead of an average 26.1% gain by peers in the Asia Pacific Equity Income sector. Fidelity China claims second spot in the six-strong sector.

Nicholls’ portfolio stands out over one year, with an impressive return of 51.4%, outpacing 21.3% by the sector average and ensuring its top position in the rankings.

In the latest factsheet for the fund, Nicholls said the government’s stimulus measures reflected ‘a strong commitment to boosting domestic demand, aiming to drive economic recovery, earnings growth, and market sentiment’.

He said the economy has shown ‘resilience’ this year, with strong industrial production and retail sales, while policy support and fiscal spending have helped buoy consumer confidence.

‘However, challenges persisted, particularly in the real estate sector,’ he said.

‘Announcements of high tariffs by the US on Chinese goods resulted in retaliatory measures from China. Nevertheless, the subsequent willingness of the US administration to engage in negotiations helped ease tensions.’